Basics of a pitch deck
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The document provides an overview of the key components to include in a startup pitch deck for founders seeking funds. It discusses including information on the problem statement and market size, the proposed solution, business model, revenue model, competition, traction so far, and plans for the future tied to the funding request. Details should show the pain points being addressed, how the solution works, stakeholder relationships, pricing, differentiation from others, growth metrics, and specific quarterly targets aligned with the funding amount.
Basics of a pitch deck
- 1. Basics of a Pitch Deck Founders & Funds – Startup Special!
- 2. Contents Stages in a startup Problem statement Solution that you envisage Market size How will it work – Business model How will it make money -‐ Revenue model Competition – how you differentiate yourselves from the rest What has happened so far – Traction numbers, amount spent, timeline Unit economics What is the plan for the future – tie it to the funding ask Team
- 3. Stages of a Startup Idea Market research MVP Traction Expansion Alpha -‐ "this is mostly sort of kind of what it should do" Beta -‐ "this is the finished product except for all the stuff we don't realize we haven't finished yet"
- 4. Problem Statement Highlight the most critical use case that will be appropriate for your product/service. The problem must illustrate a pain point. The statement must show why it is a need. Videos work best for showing multiple use cases. Differentiate between need and want. Most typically, this will involve a segmentation of your target market (e.g., luxury fashion, high end dining).
- 5. Solution -‐ Visualization How does the solution work? How does it reach the customer (phone call, mobile app, internet, offline presence)? Showcase your innovation -‐ the value addition you bring to the table. It could be a product that: Reduces cost (MySmartPrice) Increases convenience (Freecharge) Reduces time (Bankbazaar) Provides a Return on Investment (Linkedin)
- 6. Problem – The Magnitude The total number of people/transactions actually needing this solution. Research the web for credible sources of data (PwC, Forrester, WSJ, etc.) Done any primary research? Show your survey results. Show specific pain points talked about by the people surveyed. How much were they willing to pay? Anyone in other parts of the world facing this? Showcase how other countries are tackling it.
- 7. Market Sizing In terms of numbers (already done) In terms of value It needs to be a logical deduction from a well known fact. Well known facts start with the country level data. (population, households, labor force, etc.) Don’t forget the internet/mobile penetration that can significantly bring down your market if you are a mobile/internet app service. What is the nearest substitute? How much does it cost? This will be the upper limit on the pricing of your service.
- 8. The business model Stakeholders in your business -‐ Suppliers, vendors, partnerships, clients Show the flow of services from one end to the other. The services should be very clearly defined (for e.g., in a grocery delivery business, the entrepreneur’s product would take the order and inform the grocery shop, the grocery shop would deliver the order and the entrepreneur would pay the grocery shop). The business model would ideally be able to showcase how your product innovates a conventional business model to create a value addition (revenue/cost/convenience) as well as scalability.
- 9. Revenue Model Revenue channels and pricing Who are the segments you are targeting and what is their pricing profile (high end, discount driven, value driven) Is there a way to target different segments B2B/B2C/B2B2C Freemium model Subscription vs one-‐time pay models – Amazon Prime, Pay as you go model
- 10. Competition – So far The usual table is a hygiene factor for those investors who are very conversant with your sector. Always highlight the key differentiator between you and the competition. (Team, Early mover, Partnerships, etc.) The immediate validation of your key differentiator would be the question ‘how will you protect this advantage?’. Make sure you know the answer to this question as it relates to the sustainability of your business.
- 11. Traction! Only some vanity metrics are good (number of downloads is not one of them). Highlight repeat behaviour as much as possible (number of engagements, number of transactions, growth in transactions). For a seed stage startup, 100% M-‐o-‐M growth is what the angels want to see. Cohort Analysis is a sure shot ticket to knowing and improving your traction, and showcasing this knowledge to the investors.
- 12. Way ahead Predict at least 4 quarters Have clear targets that are reasonable given the amount of funding you will be asking for. Give a breakdown in pie chart format for the utilization of your funding. Mention how it will add value to the business (e.g. CTO for product development) DILUTION: 50-‐75 L – 8 – 10% 1 cr. – 10 – 15% 2 cr. – 18 – 22% 3 cr. – 22 – 25% >4cr. -‐ >25% (depends on traction)
- 13. The Team Mention succinctly the role and the USP they bring to the table Background should come on the slides If one of them is not at the pitch, mention why. If anyone is still in their day jobs, mention why (it is a huge red flag, btw). A key criterion for funding is academic credentials (don’t ask me why!).
- 14. Next Time Financials for fundraising!
- 15. Thank You! Credits – Jose Kuttan, Co-‐founder (WeavedIn)