Playfair Capital

We invest in entrepreneurs building technology companies that rethink the way we live and work

Pitching your startup in 12 slides

18 January 2021

Introduction

At Playfair, we get c.100 pitch submissions a week through the pitch deck application on our website. We see the full range of the good, the bad and the ugly and so, I’ve summarised below some of the key sections that founders should be including within their pitch deck with examples from well-known companies who have used their pitch decks to fundraise millions of pounds.

Each section provides content suggestions that you could include. Note, the best pitch decks minimise the amount of content on the slide and focus on including only key information that is most relevant to the business.

An investor spends an average of 3 minutes and 44 seconds on each pitch deck. Therefore, prioritise structuring the deck so that the most impressive aspects of your business (e.g. the Haskell engineer you nabbed as a CTO, the 50% MoM revenue growth, the 15% CAGR market growth) are in the first half of your deck and not hidden in the final slides that the investor will never reach. Also, most early-stage investors see the A) founders, B) market and C) product (in debatable order) as the key facets to evaluating a deal so ensure that these sections stand out and that the investor can easily extract the information that is important to them.

Another consideration is the design. Now, this is no-brainer if anyone in the team — or a friend — happens to be a budding graphic designer but in the likely situation where you have to pay for a designer, the costs can start from £500 per deck. An alternative is to use pitch deck template software such as Slidebean, which offers freemium and premium subscriptions for unlimited use of their templates. Or, you could wing it and design the deck yourself. It’s debatable how much of a difference a well-designed deck makes and whether it’s worth the investment however, from personal experience, it can often make it easier to pick out and digest the key information in a short period of time. Again, considering how little time investors spend on each deck, this could be the difference between an investor deciding to follow up or not.

Remember, your pitch deck, as with any presentation, should be the final visual to emphasise your points to the viewer. Try to avoid using it as a script during investor calls.

I’ve summarised below all the key information that an investor would expect to see in your pitch deck next time you’re fundraising.

The all-important 12 slides

Cover Slide

Use an engaging high-resolution background image and include your company name, logo and tagline here. Consider including the name and contact details of the speaker.

Example:

Uber: Cover Slide. Raised £20.48B to date and IPO’d at £6.23B.

Team

Outline the founding team, along with key senior management, and the advisory board. If an advisor has ‘skin in the game’, consider adding this information to the slide to show they have additional incentive to help the founders and company succeed.

Add some detail (either text or logos) on prior experience of the team — consider the most relevant experiences to the current startup e.g. domain experience in the same industry or startup experience. It can also help to emphasise where founders have spent time together previously, either in a professional or personal capacity, to highlight they have the ‘chemistry’ to work together.

Example:

Ooomf (now Crew): Team slide. Acquired by Dribbble.

Problem

Assume that the reader has no prior knowledge of your industry and clearly break down the key pain points that you have identified. Contextualise the extent of the problem (i.e. how much of a pain point is this in reality to the buyer/user?) and outline how the customer is currently solving the problem today, and why this current method is ineffective.

Prior to meeting with the investor, a LinkedIn stalk of their background should give you an idea of how much detail to provide based on their experience within your industry (e.g. a degree, qualification, prior job role or portfolio company that is relevant to your industry suggests that they may have a higher baseline understanding).

Example:

Front: Problem slide.

Solution

Define the solution; the key features are important to understand what the product is and the benefits list the reasons for why the buyer should use the product e.g. it would save the user time, it would allow them to double their outcome, it is more cost effective than current solutions. Ensure that it is clear how your product will be solving the pain points you mentioned earlier—investors want to see that your product is a ‘need to have’ and not a ‘nice to have’ so emphasise how the buyer will have to buy your product to solve their pain points.

Highlight the scalability of the product based on how easily the product/technology can be produced and/or the limited human time required post-implementation. Remember that VCs want a product to be as scalable as possible in order to achieve that exponential growth that would make the investment worthwhile for them.

If you’re explaining a deep-tech solution, further granularity of the technology and infrastructure itself may help to explain what the solution is. Bear in mind that the reader may not have a technical background so consider keeping the technology section light and expanding within the meeting, based on the experience and interest of the investor.

Consider including use cases of your product to contextualise its use.

Example:

Reflect: Solution slide.

Market

Start by defining the target market. Then, give the TAM, SAM and SOM. The aim is to give investors confidence that there is a sufficiently large market here for your business to have the headroom to grow, taking a reasonable level of market penetration into account (e.g. 5–20% but can differ based on industry).

In the example below, the ‘worldwide’ figure of $56B is the TAM i.e. the market size if your business theoretically sold graphic design services to 100% of buyers in the world. Segment this amount e.g. by geography (this should reflect your go-to-market strategy and include the geographies that you want to target initially) or by target user (e.g. include only ‘spending of graphic design services to businesses’, if you use a B2B model) — this will give you the SAM, quoted as $11B in the example below. Both the TAM and SAM are usually ‘top-down’ figures based on the current size of the market. You can obtain this information from market research reports although, do ensure that you obtain the report from a reliable source. Finally, the SOM will be a ‘bottom-up’ approach whereby you calculate the realistic value of your market based on your revenue model, estimated number of customers and realistic market penetration.

The information above will give a snapshot of the market size at one point in time (ideally 3–5 years in the future). But no market is stagnant—it is constantly growing or shrinking. Investors want to see that the market is growing so that, even if your market share was to plateau in the later-stages of growth, the absolute value of your market share would still be increasing as the market itself is increasing. The most common metric for market growth is CAGR.

Consider the key drivers or paradigm shifts in the market that are driving this market growth such as, regulatory changes that would require your customers to buy your product or changes in consumer behaviour that would make your product the societal norm.

And finally, consider the M&A activity (and exit multiples) within your market. The investors wants to see positive exit prospects for your business in 5–10 years time. One option is an IPO but, it is more common that a successful company will be acquired by an incumbent therefore, strong M&A activity suggests that larger players in the market are an exit option.

Example:

Slidebean: Market slide. Raised £0.96M to date.

Go-to-market

You’ve convinced the investor that you have a large enough market. But how do you plan on reaching your customers in order to sell to them? Options include direct selling, partnerships and the reseller model. For B2C businesses that are highly dependent on marketing for user acquisition, illustrate your marketing strategy.

Example:

Front: Go-to-market slide.

Business model

Explain the revenue model, with all the revenue streams. Emphasise any scalable, predictable cash flow (usually in the form of subscriptions) which is typically preferred by investors over one-off, transactional cash flow. Highlight if your business model is ‘disruptive’ i.e. a significant change to what customers will be accustomed to from incumbents in the market. Airbnb is a classic example of having a disruptive business model by creating a low-cost solution for a low-value customer where the alternatives were high-cost, one-off hotel costs.

Consider including unit economics, such as LTV (the lifetime value of the customer) or CAC (customer acquisition cost), as they are key metrics for the investor to evaluate whether the company is likely to reach profitability and when.

Example:

Airbnb: Business model slide. Raise £4.63B to date and IPO’d at £765.87M.

Competition

Identify your closest direct and indirect competitors —this information can be clearly laid out in a quadrant or table format (such as in the example below). Include incumbents who may monopolise the market, as well as disruptive startups that may hold very minimal market share today but are a future threat to your growth.

Labelling the key features or products each competitor sells can help to emphasise any key differentiators — such as in the example below where Dropbox includes it’s six features hence, highlighting the key differentiators between Dropbox and its competitors.

Consider the competitive advantage that your business has e.g. the founders’ knowledge and contacts, a product that is protected by IP or patents, and the ability to produce the product at a lower cost than competitors.

Example:

Dropbox: Competition slide. Raised £1.78B to date and IPO’d at £543.1M.

Traction and pipeline

Traction expectations can vary based on:

  • The stage of investment — later stage investors typically place more importance on traction whereas early stage investors focus on the founders and market)
  • The stage of the company—investors may expect higher traction if you have been selling for four years as opposed to two
  • How technical the product is — deep-tech companies are likely to focus more on product development in the early years and less on traction

The point being: contextualise traction with the wider story of your company to put it in perceptive.

The investor wants to see a healthy pipeline of opportunities to fit the exponential growth narrative. Give a visual representation of the companies in your pipeline, ideally with the stage and value of the opportunity.

Example:

Facebook: Traction slide. Raised £6.93B to date and IPO’d at £9.94B.

Roadmap

The investor is not simply investing in what your company is today, he/she is investing based on the future growth prospects of the company. Therefore, it is key to show the key upcoming milestones and roadmap. Areas to include are:

  • Technology
  • Expansion opportunities via new markets
  • Next fundraise

Example:

Pendo: Roadmap slide. Raised £163.46M to date.

Financials

A snapshot of your P&L in font size 5 will likely be skipped, mostly because numbers in isolation do not tell a story nor provide analysis. Instead, consider emphasising your key metric and presenting it in a visual format such as the example below. Metrics will differ company-to-company, particularly for B2B vs B2C companies. Bear in mind that management metrics, such as ‘number of positive reviews received from consumers’, may not be valued as highly as commercial metrics to the investor.

Example:

MatterMark: Financials slide. Raised £11.94M to date.

Fundraising

Describe your funding history and any institutional investors that have invested to date.

Include the ask of the amount that you are raising and explain the use of funds.

Example:

Intercom: Fundraising slide. £167.48M to date.

And that’s it.

Remember, the aim of the pitch deck is not to immediately secure funding, it’s simply to secure the next step in the investment process—tailor it accordingly throughout the process and depending on the individual investor!

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