What do investors want to see in startup pitch decks? For founders seeking funding for their companies, that's the million-dollar (or multimillion-dollar) question.
After years of gathering personal pitching experience — first as the copresident and director of startup medical device company Digital Cognition Technologies (DCT), where she successfully helped raise $9.6 million for the company, and later by conducting market research on pitching and interviewing early-stage investors as groundwork for her current startup — Byers came up with 10 elements investors are looking to see covered in pitch decks.
"This was the result of hundreds of pitch deck iterations and no less than 100 pitch presentations," Byers told Business Insider. She then put this list in front of dozens of investors, including angel, VC, private equity, and family office investors, asking if the slides covered what they wanted to see.
"The diverse set of investors I spoke with overwhelmingly supported this structure, and while no deck will make everyone happy, I believe these are the core elements to satisfy most," she said.
Here's a breakdown of the 10 key elements, with visual examples from real pitch decks.
1. A mission, vision, or origin story
The best mission statements are straightforward and take the guesswork out of what it is exactly the startup does. These first few slides are also a great place to share the company's origin story — the reason for creating the company, a personal connection to a problem, and the founder's expertise.
"How would you explain what your company does to a third grader?" Byers said. "Use that language on your slide and in your presentation."
Testing out a potential mission statement on friends and family and asking them to describe what your company does can also help. Most likely, they'll restate your mission in even simpler terms. If they don't, they were likely so confused by what you said they tuned out when you were talking.
"He had crafted a vision statement in a format he thought investors wanted to see, but it was generalized and didn't convey the root of his vision for his company," Byers said. "We got to the heart of his origin story and put his mission in language anyone can understand and relate to."
2. The problem
Founders have the unenviable job of convincing investors the problem they're looking to solve is real and needs to be addressed ASAP.
To do that, Byers suggested quantifying the problem in terms of dollars or other figures.
As with the mission statement, these pain points need to be addressed in plain language that's accessible to the average individual.
"It can also be good to phrase the problem in terms of the opportunity it presents," Byers said.
"We modified the text to simple sentences that many people will personally relate to and added a statistic that calls out the problem in an acute way," Byers said.
She cautioned that too much data can be overwhelming to potential investors, so striking a balance is key.
"I struggled with this myself," Byers said. "There is a mountain of data highlighting both the funding gap for diverse founders and also the opportunity that exists for investors to fund an undervalued asset class."
"I was presenting so much data that it dampened the impact," she added.
"Pairing a powerful statement with a single supporting data point draws more attention," she said.
3. The solution you offer
Once founders nail describing the problem, the solution they offer has to tie back to the pain points presented. This slide is a good place to include screenshots or illustrations that visually explain what your company offers.
"Don't make the investor do the work of tying your narrative together," Byers said.
"Most people, investors included, aren't familiar with your industry or terminology and often won't ask if it's assumed they should already know what something means," she added. "Write out acronyms and simplify your language, even if you're dealing with complicated science or technology."
While the examples of the before and after Byers shared from beta member Joel Francois, cofounder and CEO of offline marketing engagement platform Helius Power, look similar, there's one key difference.
"We added powerful header statements throughout his deck for a strong narrative that creates a continuous flow among his sections," she said. "This headline statement directly follows the previous slide that outlines the problem."
4. The business model and how you'll make money
Here, founders have to explain who their customers are and how they plan to monetize their business. If there are multiple customer types, executives will need to plan what each group will be charged.
"Investors want to know that you understand your primary revenue sources and the cash-flow implications of your business model," Byers said. She recommended that founders arrange their business model slides before their market size slides.
"Investors need the context of how you make money and what your average revenue per customer is to understand where your market size numbers come from," she said.
5. The market size
This is a slide many founders often overlook — and if they do put something together, it often misses the mark.
Byers said that many take a "top-down approach," such as, "The cosmetics market is $X billions. If we capture just X%, it's a $X billion opportunity."
"This isn't convincing to investors and it isn't particular to your business," she said.
Instead, startups should focus on a "bottom-up" approach to market sizing. This means doing the following:
- Define what the total addressable market is in a way that's relevant and concludes there's a big enough audience for a return on investment.
- Provide an estimate of the sizes of the "serviceable" market — that is, people who can be reached — and "obtainable" market — that is, people who can be convinced to become customers — which should guide the company's focus for the next 12 to 18 months.
6. The competition
How your company's offering stands out compared to options already available in the marketplace — that's what a competition slide should be able to convey, at a glance.
Per Scroobious, a competitor "matrix" should:
- Include information about the founder's startup in the first column, followed by four to five of the most relevant competitors in the next columns
- List the tangible benefits of each company for the customer so they're clear to non-industry audiences
"Her competitor choices communicate where she sees her product in the existing landscape and her customer benefits are distinct and easy to understand," Byers said.
7. An explanation of why your company is needed now
Investors want to know how founders can directly address the needs and realities that exist due to COVID-19 and the related economic and social circumstances that have resulted, Byers said.
"Emphasize how your solution is accelerated by the world today, but not defined or dependent on it," she said. "We are living through surreal times, but today's restrictions aren't permanent."
Byers shared a slide from a Scroobious beta member, Quinn Wang, founder and CEO of Quadrant Eye, a company that offers remote eye exams, that communicates how her company is addressing a problem caused by the pandemic while also demonstrating how it can stay relevant in the long term.
This portion of the deck is also a great place to share any proof of concept or momentum, Byers said.
8. The go-to-market and customer acquisition strategy
Founders don't benefit from listing generic marketing tactics, such as social media ads, partnerships, or word-of-mouth marketing — but there's also no need to go too deep into the weeds and illustrate what your marketing spend will be per channel, Byers said.
The goal instead should be to present the specific, relevant channels that are unique to your business.
As an example of this, Byers pointed to financial modeling platform MRGN's go-to-market slides from their pitch deck.
"Keep in mind that your selling strategy should align with the lifetime value of your customer," she said. "If your customers have a high average revenue potential, higher cost channels like strategic partnerships make sense. If your customers have a low average revenue, your acquisition costs also need to be low."
9. Team and founder fit
The earlier stage the startup is in, the bigger the bet investors are taking on the founding leadership team to take the financial backing and deliver on the stated mission with a return on investment.
"You need to convince an investor that they should trust you with their money," Byers said. "You may have described your origin story at the start of your presentation, but this is your chance to state why you and your team are the right people to be building your solution to the problem."
The CEO recommended making use of bullets that get straight to the point and highlight key experience. She suggested addressing the following questions:
- What knowledge and skills have you developed that make you a fit for the task?
- How are you supplementing what you have to offer with other team members or advisors?
"Be sure to communicate your knowledge or connection to the users of your solution as well as your skill set," Byers said. "This is particularly important for underrepresented founders, whose solutions might serve segments where investors don't have the first-hand experience."
10. A thank you with your contact information
You've made it to the end of your pitch deck. Now what? Simple: Include a thank you note, contact information, and any appropriate social media handles.
"When you are presenting, be sincere when you thank the investors," Byers said. "The importance of your passion and authenticity can't be overstated."
Ultimately, founders are the experts of their own businesses, not investors. And a winning deck comes down to not just simply addressing what the investor wants to hear, but delivering a "key value proposition," she said.
"Telling your story in a way that is authentic and meaningful to you will always win over trying to tell the story you think someone else wants to hear," Byers added.