Your fundraising materials are the only tool to show why your story and your company are worth to be invested in.
Investment materials serve as a fundamental part of the fundraising process. No matter how brilliant your idea is or how many customers you have at the moment. What is important is to make a compelling presentation of your achievements.
Your goal is to make potential investors afraid of missing an excellent opportunity.
To achieve that, you need to write down your memo, build your pitch deck, and practice it. The leitmotif of your activities at the stage of preparation is a clear picture of your company and getting in line with such unicorn startups that they were Uber, Airbnb, or Dropbox.
And before we take a closer look at how to prepare your investment materials, there is a useful tip. Build your pitches regularly.
It will help you to always be in good investment shape. Such an exercise helps you to take a look at what you do from a distance, the same way an investor would look at your startup.
It will show your weaknesses and give deep insights.
Let’s take a look at the materials you will need to present:
- Investment Pitch Deck. It is a visualization of your project from the moment of an idea to current achievements and plans of growth in the market.
- Memo for fundraising. It’s just your notes on the reasons you’ll change the market soon. Your pitch should be clear, understandable, consistent, and logical.
- Pitch for investors. It is a presentation of the way you’ll communicate with investors. It includes what you will say, how, when, etc.
This part draws your focus on how to prepare materials for the presentation that would instill confidence in your project.
Investment Pitch Deck
Your investment pitch deck is a crucial part of the entire fundraising process. It represents the quality of your startup and the efforts you have invested in business and development.
Thus, the pitch deck should be clear and consistent enough to ensure the potential investors they are making the right choice when giving you money.
Let’s take a look at the structure of the investment pitch deck and find out useful tips on how to build the one that will help in raising funds.
Structure of a Pitch Deck
- Start with an introduction. The first slide should include your company’s name and a tagline of what you do.
- The Problem slide. What is the customers’ problem you are solving? How relevant is this problem? How did you validate it?
- The Customer slide. Who are your customers? How will you reach them? Why would they use your product instead of the current solution?
- The Solution slide. What solution did you create? Why is now the right time for it?
- Your Vision. Your most expansive opinion on why your new company exists. What differentiates you from the others?
- The Market you are addressing. Your Total Available Market (TAM) should be >$1B, if possible. Include the most persuasive evidence.
- The Market Landscape slide. It should contain a description of market competition, macro trends, etc. Are there any benefits your product has that others don’t? What are they? What is your “killer feature”?
- The Metrics slide. List key statistics and plans for scaling and future customer acquisition, churn, and retention rates. How would you improve these metrics?
- The Business Model slide. How will you monetize your product? What is your vision on growth and potential? Why would it work out? What is the unit economics of your business?
- The Team slide. Tell who you are, where you come from, and why you have the potential to succeed. You can add pictures and biographies if you want. Specify roles and competencies. It is excellent if you can include your previous successful experience on projects.
- The Summary. Sum up everything and include major insights and statements such as market size, current traction, growth rate, and growth potential.
- The Fundraising. State the information as to the funds you have already raised, invested in. Include the details on how much money you are planning to raise now. Any financial projections may be mentioned here as well. You can optionally include a summary product roadmap (6 quarters at maximum), indicating what an investor would receive.
This structure is based on the successful fundraising experience of such giants as Dropbox and Airbnb.
However, we’d like to recommend checking out these investment pitch decks templates as an additional source of insightful information.
Startup Pitch Deck: Design Tips
As we have learned from experience, sometimes founders have a robust set of data but lack a well-made design.
It’s a typical case if there is a lack of priorities. Thus, it’s crucial to design data you want to share clearly and engagingly.
- While making a pitch, you aim to tell a story. Hence, you can put your mind-blowing numbers on growth and traction right after name and tagline, why not? Our structure just highlights the standard and required data. You can do it own way since there is no one-stop guidance.
- Modify your pitch each time you present it. First of all, collect feedback. Secondly, adopt the content accordingly to a particular investor, hence, do a background check.
- Explain complex issues in simple terms. Use everyday language and trustworthy examples.
- Design your metrics to make them readable. Do not use too many graphs on the same charts. And don’t forget to explain your insights.
- And, of course, make your presentation readable and clear. Do not use toxic colors, too many fonts, or thin fonts.
Investment Pitch Deck: General Tips
Let’s consider tips and examples on how to generate proven and useful content for your pitch deck.
- Include validated figures and mention the options on how to scale these metrics.
Mark Zuckerberg’s pitch deck for Peter Thiel, from whom he got $500,000 as the first investment, was filled with metrics. He showed the rate of user engagement, amount of traffic, number of users, and the potential to grow.
Similarly, Buffer (an app that lets the users schedule their content on social media channels) also focused on figures in the first place.
It proves that numbers mean a lot. When you try to find private investors, do profound research, and show investors the figures.
- The information should be structured yet concise and engaging.
Airbnb’s introduction is one of the most referenced initiations to business in terms of finding investors for startups.
Try to make your pitch as short as possible. It should keep everyone hooked from the beginning till the end.
- Prepare a strong Unique Selling Proposition.
Linkedin was sold because of its uniqueness and the way it differs from other social media platforms. The company’s pitch deck described Linkedin as the next generation of networking platforms.
Taking a cue from this, include those points in your pitch that prove the readiness of your product for the future.
Why does it stand out from the others? What makes it better? Answer all these questions to identify your USP and stick to it while pitching.
- Do traction first, then ask for investments.
The first question every founder asks is, “How to find investors for my idea?” But it is better to begin with finding out how popular your idea or product is.
As an option, utilize social media and gather reviews and recommendations.
Mapme took this approach. The company’s pitch deck was short and contained social proof. The company raised $1 million due to a few factors covered by proof of traction.
They highlighted the number of users, number of sessions, and visitors to impress the investors. And apparently, it worked.
Lastly, a pitch deck should also be designed accordingly to the stage of the investment and the traits of investors.
There are various stages of startup funding, so you should know your current stage and the next one you aim to step in.
Prepare a pitch that corresponds to the needs of investors, your current market position, and highlights the product’s values.
Feel free to dive into this content marketing for startups guide to learn practical ways to make your brand memorable.
Investment Memo
Your memo is a fundamental part, along with a pitch deck and pitching itself. But why? It is vital to structure what you have to say before actually saying it.
Just imagine how much information you need to present – a considerable amount of data, concepts, and charts. A memo will help you structure all the details in a single piece of information.
Another advantage is the simplicity of the text. It’s a fast and cheap way to create a so-called “prototype” of your raising funds process.
Now, let’s take a look at the process of memo generation.
Most importantly, imagine that you are an investor. What if it were you to invest personal funds, let’s say, $50, $100 or $500 thousand in the project. What would you like to see and hear?
You should know that investors like to make memos as well. It might be the mirroring of what you present but from a financial point of view.
So, the clearer you articulate the key points, the higher the chance to get investments or collect valuable and insightful feedback.
Let us share a memos template to help you find the starting point.
The structure will be the same as for your pitch deck:
- Intro:
- What do you do?
- What is the problem you are going to solve? Does this problem exist? Is it a relevant problem? How is this problem solved at the moment?
- Will your idea reinvent the customer’s behavior? How?
- How will you monetize your solution?
- Traction and metrics:
- What are the most crucial metrics for your project?
- What are your revenue drivers? Why?
- What is your go-to-market strategy? What are the key points and tactics you are going to use?
- Market:
- What is the size of the market? Is it big enough for a seamless and unlimited scale?
- Who is your ideal customer? How does he or she act and think? What makes your customer use your product?
- How many competitors do you have? A tip: you are competing not only with other products but with the ways to solve the problem.
- Scalability and growth potential:
- What is your growth strategy? What are the growth points?
- What may be challenging while attempting to grow even faster?
- Your team:
- What makes you special? What is the unique set of skills that would lead to the fastest market launch? Why?
- Funds:
- How much money have you already invested? How much return have you already gotten?
- How much money do you need to grow? Why this particular figure?
- What will you do if you raise less or more money than you expected?
Remember the last thing — clear writing is a must-have to create viable memos. So if you don’t write well, it’s time to start learning. Your documents need to be precise. Since it is the main requirement, we will repeat it once more.
Throw away all unnecessary information and leave only those things that answer each question.
You’ll have only one chance for a pitch. That’s why sharing your memos before pitching is a good idea to form the right context for investors.
Investment Pitch
What is the process of pitching to investors? It’s a 20-30 minute meeting, during which you present your company and reasons why an investor should give you money. Sounds easy, isn’t it?
Your deck and memos are the basis on which you’ll build your pitch and pitch strategy. After your presentation, there will be a Q&A session, so just believe, all these materials are necessary to prepare.
Think of this meeting as your moment of glory. All you need to do is to infect investors with your enthusiasm, passion, and ambitions. And show the proof that you will be able to achieve every statement from the list.
The main concern of investors is losing an excellent possibility to invest and make money. They are the entrepreneurs, as you are.
A pitch has 2 points to consider: your content and pitching itself.
The content part contains your memos and pitch deck. And it’s highly important to prepare each of them engagingly and confidently. But how to find a way to impress investors? The answer is simple – practice, practice, and again practice.
However, let’s take a look at the most crucial tips on how to make your pitch effective:
- Speak without generic phrases. Eliminate all the “so,” “etc.”, and “as you know.” It won’t work since the generic language doesn’t look reliable.
- Speak simply and straightforwardly. Avoid complicated things, but rather try to convey your thoughts naturally and directly.
- Use examples. If you speak about real people, don’t mix these examples with generic user portraits.
- Speak slowly and in a declarative manner.
We know that all these tips may look obvious. But the main thing is to practice and follow all these points.
A few words about practice sessions: use the same principle you follow while developing a product. Speak, collect feedback, analyze, and improve your pitch with each iteration.
This approach will help you to understand what your listeners like and what they don’t.