Introduction.

Hello, dear startup founders.

I apologize at once for the long read, I tried to describe everything briefly, but practice shows that it is necessary to explain everything in detail so that it would be easier for teams to implement.

This is my first article, so please don't throw too many stones. I hope it will be useful, because as a mentor and judge at Alchemist Accelerator and a venture partner at Startup Network, I see the same common mistakes in decks and pitching. So I've created my own investment pitch structure using my experience and feedback from several friends in the US VC funds and startup founders.

Some might say that there are many different structures that investors offer, so which is the best one to use?

I can tell you: it depends...

Depending on where and what you're pitching. And yes, there are many different types and styles of decks, also most venture capitalists have an opinion on what you should or should not include in a deck. My recommendations are more about how to improve your deck in terms of showing the maturity of your idea/product and ability to build a business, ideally a monopoly or duopoly.

The Deck

First of all, I would like to draw your attention to understanding what a pitch is. I like to say that it is a demo of a business plan.

You're not just telling an investor how good you are, you're making a sale, only more complicated. You have to sell your product, your expertise, and your stake in the company.

We live in a fast-paced society, so no one has time to read 50 pages of text and numbers, everyone prefers an investment pitch or elevator pitch. So if you are building a SaaS solution and send a comic book to an investor, you probably won't get a response from them.

Remember, the average review time for an investment deck is 3.20 minutes, according to DocuSign. Be concise and try not to use professional or industry terminology. And no "buzzwords," investors hate them. Your deck won't always be reviewed by experts in the field, but even if it is, remember that investment decisions at VCs are made by the investment committee.

The GP/MP or associates will have to put together an investment memorandum based on your deck. And they will have to work on simplifying your presentation, making it clear, and highlighting metrics and key benefits so that other partners will vote to invest in your startup. Respect their time and improve your chances through simplicity and by being short.

Quick tips:

1. Most of the time your deck will be viewed on the phone. So make sure the investor doesn't need to zoom every part of the deck. Use a larger font.
2. Fewer pictures or pics. Only if they help show how your product works.
3. Each thesis statement should contain no more than 2-3 sentences. Fewer words.
4. Highlight key points and metrics. So that by reading them alone, investors can understand what they are talking about.

The structure:

This is a unified version that incorporates most of the wishes of investors. It can be modified for different situations. For example, the slide with the team is put at the end of the pitch, because you need to prove to the investor that he sees in front of him the professionals who will build the business.

But if you have team members with big names in your industry or who have worked at top companies in your sector, you can move the "Team" slide to the beginning of the deck. This will help create a credibility hook.

15 slides:

(You could say that this is the perfect state of the dish.)

Problem/solution

1. Cover. Only the name and a very brief description of the product.
2. Brief. This is essentially a one-pager with the main key points of the whole pitch. This will give the investor a quick impression of your startup, and they are more likely to look at the whole deck.
3. Problems. Before you describe problems, make sure you have evidence of your customers' pain and problems by interviewing them and researching the market.
4. Solutions. Please describe only those solutions that address the specific market pains and customer problems highlighted on the previous slide, and be sure to indicate how your solutions will help solve them.

Product

5. Product. Description of the product and how it works.

6. Demo.

   Here you need to show how your product works by sharing examples of how to use your product. You can find a very good example on the product slide in the first AirBnB deck. Product slides and demos can be combined.

7. Features & Benefits. Not a required slide, all items can be listed on the competitor comparison slide.

8. Business model. Describe how you plan to make money, show monetization, subscription plans, commissions, etc. Include unit economics (optional), as well as CAC/LTV ratio metrics. Keep in mind that for early-stage startups, this metric should be at least 1/6, otherwise unit economics may no longer work in the later stages of product development. This means that your company may become unprofitable in the sense that CAC will only grow over time.

9. Traction. Proof that the company can make money or that your product fits the market. Show revenue, MRR/ARR*, and a breakdown by country or customer is great here. You can also show customer excitement, testimonials, waiting lists, pilots (try to sign customers up for a paid pilot, since a free one will probably end up with nothing), LoI agreements, etc.

   Metrics like traffic, downloads, and registrations don't show customers' adoption, so you should also add DAU/MAU, a "stickiness" or power curve would also be a great indicator if your customers use your product at least 20 days a month, that is a very good sign.

   Churn, don't forget about it - a common mistake when founders focus on growth and forget about retention. E.g., founders claim they are growing at 50% per month, but they have 30% churn per month, in which case their growth will be much lower.

   Make sure you are sharing all the traction in dynamics for the last 3-6+ months.

Market

10. Go-to-Market. The go-to-market strategy is built like a pipeline, starting with the customers who are the cheapest or even free in terms of acquisition and the fastest in terms of time to sign a contract. The first iteration of this path will always be the early adopters, whose maximum capacity maybe 2.5% of the company's market size.

    Then mid-size clients and finally, you should focus on large corporate clients or other large clients depending on your ICPs. These types of clients should be at the end of your pipeline because with them the contract signing time is much longer and could take up to several years in some industries.

    Essentially, this means that focusing on large clients at the beginning of your journey is not the best way to grow. Investors expect to see at least 20-30% growth MoM from you, which is not something you can achieve by focusing on the big fish in the river. (Of course, if you are in the B2G or B2B segment, focusing only on medium and large businesses, then you need to identify who your early adopters are in this case).

    For each ICP, you need to describe your sales and marketing activities so that investors understand how you will approach your customers at each stage. In addition, you can show a strategy for land expansion. What country will the team start in and what markets will it expand into?

11. Market size. I know it's much easier to just open up Google and find analytics. But for investors, it means you know how to use Google. Remember, the size of the market determines the amount of revenue your startup and product can generate.

    And that means that when you reference analytics in your deck, you are showing NOT YOUR market size, but the market size of your competitors or even too different products. That doesn't include your company, the analytics may not be relevant at all, no one knows who calculated it or how, and your competitors have different business models and unit economics.

    TAM is a measure of what the market size would be if the startup potentially took 100%. TAM = number of customers X average/annual product price.

    SAM = market size, taking into account your competitors, geography, and the buying characteristics of your customers. For example, if you don't plan to operate in a certain country, take away that market, or if you know that in a certain country some of your potential customers, say 30%, have below-average salaries and they can't afford your product, that should be considered too.

    SOM = market share that a company can capture based on its strategy for the foreseeable future, usually within 3 years.

    And always show the math on the slide!

12. Competitors. VCs would like to see your "killer" feature or unfair advantage, and how you can solve a customer problem 10 times better than the competition. This means you can disrupt the market.

    Don't use the square method, as one of my friends says: it's bull@#t, and the square is dead, as you're only comparing yourself to other companies on two axes. And, of course, 100% of the time your company will be in the top left corner.

    Instead, use a comparison table with a list of your top 3-5 competitors from left to right and a list of your top 3-5 benefits, with an unfair advantage in the top row. This means you should show how your customers or their business would benefit from your services or products compared to your competitors' solutions.

    For E.g. better UX/UI is not an advantage. Think back to the first iterations of TOP companies, most of the time there won't be a pretty UX.

13. Team. Show the founders and team members, briefly describing their experiences. Do a breakdown and show who works at the company full-time and who works part-time. Remember, you need to describe your experience in the business and industry.

    If you're the author of a dozen best-selling books or a keynote speaker, please put that down, that's not the best way to introduce yourself to investors. In the venture capital industry, this is called a 'limelight-seeking' founder, It means that the investor will see someone who is chasing fame, running from party to party, trying to get attention, not building a business.

14. The Ask. How much money are you going to raise and on what terms? Be specific, ranges of numbers are unacceptable, you will only show that you do not know your market, you have no fundraising strategy, and you do not know how to build a business.

    For instance, we are raising $1M SAFE, the minimum ticket is $100k. Or, we raise $2M - for 10% capital, $20M post-money valuation. Minimum ticket $200k

15. Financials. Show in more detail how the investment will be used, what milestones the team will reach, and how much you will grow by achieving those milestones in specific terms. For example, we are investing 50% in sales. Why? We will hire 5 additional sales managers. Why. We'll be able to handle 3 times as many customers each month, and that will give us a +$100k increase in revenue per month.

    Show your runway. It should be 12-18+ months, this will help founders dilute their capital less often. The fundraising period can take up to 6-8 months, during which time the founder or one of the founders should set aside 80% of their business responsibilities in the company and focus on fundraising.

    If your runway is 6-10 months, it means that once the round closes, you have to immediately start preparing for the next round, so you won't have enough time to focus on your business and growth.

P.S. Prepare the data room. In addition to P&L, agreements, patents, and IP, investors will also ask about the financial model, it should be calculated over an average of 36 months, you can also develop a strategy for the cap table.

That's it. I hope this is helpful.