For many entrepreneurs, fundraising starts with one job, creating a fantastic pitch deck. Long hours are put into creating the best design, polishing financial forecasts, looking into the market, and transforming the business concept into a captivating story.
Here is the truth: a good pitch deck can help you stare in the eyes of investors but cannot guarantee funding in any way. A pitch deck is crucial for fundraising, but investors are looking beyond it, as they need to know everything about the company, the market, the finance, the opportunity, and the people standing behind the business idea.
Myth: If you have a flawless pitch deck, you are guaranteed funding.
Having a well-made deck can help make a great impression. It can provide clear information about your business concept, market opportunity, traction, and plans for growth.
However, the quality of the presentation is rarely the only criterion used in making investment decisions.
An investor may hear a great pitch and then ask:
Is there a real demand for the product?
Who are the end-users of the product?
Is the business model viable?
What achievements have been accomplished?
How competitive is the market?
Can this business grow?
Does the founding team have the ability to execute?
Truth: Investors Look for the Business Behind the Deck
A pitch deck is mainly used to tell a story. It is used to show the investors what the entrepreneur is working on and why it is important.
However, the real evaluation begins after the slides are presented.
The market potential, customer need, revenue generation, financial results, competitive edge, scalability and team can make an investment happen.
For instance, one startup has a great idea but does not have any evidence that there is a need for it. Another has strong revenues but has low profit margins. The third one may be doing great but finds it difficult to compete with others.
Each business has a different story. This is why there is no unique recipe for a successful pitch deck. The deck tells a story but it is up to the business to validate it.
Myth: The More Slides There Are, the Stronger the Deck Is
Sometimes, business owners feel that adding more details to their presentation will give their company more weight. However, this is not always the case. If their presentation is overly complicated by different slides and lots of information, all the opportunities may get lost. The proper presentation should give answers to several crucial questions:
What is the problem?
Who experiences the problem?
What is the proposed solution?
What is the opportunity?
How is money earned with this idea?
What are the results achieved?
What makes it unique?
How will the company grow?
Why is money needed?
It is not important to share every detail with investors. What matters is to convey the ideas appropriately.
Myth: A Good Idea Is Enough
A good idea can attract attention. But it is the implementation that turns ideas into businesses. Investors want to see whether the founder has made any progress since the idea stage. Depending on the nature of the business this could be represented by various factors, including customers, revenues, product usage, partnerships, etc.
The role of the founder becomes important at that stage.
Can they understand the market?
Can they change the strategy if something does not work?
Can they build and lead a team?
Can they make difficult decisions?
Can they execute their vision?
Importance of the Figures in the Story
This is how the pitch deck offers many impressive forecasts for the upcoming 3-5 years. However, investors wish to make sense of the assumptions that are behind those numbers. When you predict revenues of ₹10 crores, what is the stimulus of the growth? Moreover, how many customers you need to attract?
What is the price of acquiring a client?
What will be your profit margins?
Thus, what is the expected operational cost?
What do you do if growth is lower than forecast?
The more closely the pitch story is linked to the figures, the more persuasive it becomes.
Besides, the founders should ask themselves the question not just about how much money it is possible to get, but what it is needed for.
Capital should have a clear aim.
One can use it to:
1) Enter a new market.
2) Create technology.
3) Find proper specialists.
4) Raise production level.
5) Get a client base.
6) Power operations.
7) Advance a profitable business model.
Overall, a rationale for the funding goal should correlate with a feasible growth plan.
What actually constitutes a strong pitch? It is not necessarily the one with the most appealing graphics.
But it is the one that succeeds in combining:
Clarity + Data + Market Awareness + Traction + Strong Execution + Credibility of the Founder
The founder should possess enough knowledge of the business in order to be able to address difficult questions without having to depend entirely on the slides.
Because the time for presentation will come to an end.
And the time for the questions will come.
And that is when the real talk begins. A perfect presentation doesn’t guarantee any money received. It may help to open an opportunity for some discussions.
But the investors would want to look at the real opportunities that lie beyond the presentation.
Instead of asking:
“How to make my presentation perfect?”
The founder of the company should ask the following:
“How to make my company behind the presentation strong enough?”
Because a good presentation catches the attention, but a good company is something investors will want to invest.
