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What should be in a venture capital pitch deck?

Answers

Topic Expert
Mike Caruana
Title: Director of Financial Services
Company: Diamond Resorts International
(Director of Financial Services, Diamond Resorts International) |

Your question doesn't indicate whether the enterprise is a true start up or an established company that is looking to take it to the next level. Assuming the former, you must have a killer business plan...period. You won't get too far out of the box without it. If it's strong enough to interest them, they'll tell you what they want to see next.

Last November, Forbes published an interesting article by Geri Stengel titled, "Want Venture Capital? Here Are 10 Must-Haves". You may want to give that a quick read, too.

Topic Expert
Kent Thomas
Title: Founder
Company: Advanced CFO Solutions
(Founder, Advanced CFO Solutions) |

Mike is correct - a great business plan is a must but it must be real. VC's want to know:
1. The market & customers who will buy from you first, so you had better know them well and be able to describe how big the market is and what "pain" you are solving with your product / technology / service.
2. All about the team who will execute on the plan - your experience, drive and past successes - give them a brief but thorough bio on each of you. If you have "holes" in the executive team currently, address how and when you plan to cover them.
3. What your sales and marketing plan is (i.e., how you will attract customers and turn those leads into revenue).
4. About the competitors who you will have to overcome in order to be successful - be prepared to describe why your solution is better for the customer.
5. Your business model (i.e., how you make money in this business and realistic, well prepared financial projections that demonstrate what will result from your stated strategies if the assumptions you've made turn into reality). BTW, they will also want you to be prepared to discuss what you will do if your assumptions actually don't materialize - you don't need to have this in the slides but do be prepared to talk about it.
6. How much money you need to raise, what you need it for (use of proceeds) and some sense of what you are offering in return for their investment.

Hope this helps.

Anonymous
(Managing Partner) |

Assuming you are a start-up or early stage company. You should include the following. Remember to look at it from an investors perspective. 10 to 12 slides at most! Your time may be limited, so you should be able to cover this in about 10 minutes, if need be.

1. Introduction
What is your company name and what does the company do (very high level)?
Provide a real-world setting/example/story the audience can relate to
What stage are you in (are you selling now?, proof of concept etc.)

2.Market Need/Opportunity
What is the market need?
What is the pain associated with the problem?
How is the market solving teh problem currently?

3. Value Proposition
What problem does your product or service solve?
How do you solve the problem better than anyone else?
What is your unique niche and value proposition (is it compelling)?
Where does it fit into the vlaue chain?
Is it scalable into other markets?

4. Market Segmentation and Size
What are the segments that make up your market and big are they and addressable?

5. Products/Services
Briefly explain your products or services.
What state of development are they in?
What is the barrier to entry?
Explain how you generate revenue

6. Competition and Intellectual Property
Who else is providing a solution to this problem?
Where do you rank against them?
How are you different/better?
What is you IP? Do you have a proprietary and defensible position?

7. Go-To-Market Strategy
What is you strategy to go to market?
How will you drive revenue?
How will you reach customers?
What partnerships or alliances are necessary?

8. Milestones
A simple chart showing the major milestones at key dates

9. Management Team
Who are they and what is their relevant experience?
Focus on accomplishments rather than activities

10. Financial Projections
Assuming you receive the funding, what do you anticipate revenue and EBITDA to be over each of the next 5 years?
A chart is typical here.
If you asked for more money, could you scale faster and become profitable sooner?

11. Funding
How much money have you raised so far?
How much from founders?
How much money are you asking for now? In the future?
How will the funds be used?

12. Summary
Review the problem
Review your value proposition
Ask for the money
Thank the audience and solicit questions

Remember the investors are trying to determine what the return on their investment would be, when and at what risk!!

Good luck.

Reed Kingston
Title: Managing Director
Company: StrataFusion
(Managing Director, StrataFusion) |

Sound advice from everybody...from my personal experience, I would just add the following suggestions...

(1) You have about one minute to communicate to the audience why they should invest the next 30 minutes hearing you out. I'm not suggesting a glitzy "hook," just the basics that they'll use to assess the alignment of your opportunity with their investment criteria. In a single slide, and in less than 60 seconds you can cover (a) the market opportunity (what is the problem or need you are addressing, and you estimates of the total available market), (b) your solution and why it is compelling/unique, and (c) your mission and/or vision for your business.

(2) 10-12 slides is a great guideline for an initial presentation. Be ready with backup slides, and know where they are and how to get to them directly in your Powerpoint show. But let the conversation direct how how/when you use them--success isn't using every slide in the appendix, it's clearly explaining your investment opportunity so they can evaluate the fit with their criteria. If they are interested and you've done a good job instilling confidence, they'll ask for more information and drill into some of the details, either at the first meeting or later.

(3) Lastly, remember that you're selling an investment opportunity, and the sales cycle continues well beyond the first meeting. Your objective in that first meeting is not to close the deal, but to qualify it. Success is getting agreement to take the discussions to the next stage.

Mark Matheny
Title: VP - FInancial Planning and Analysis
Company: Novolex (formerly Hilex Poly)
(VP - FInancial Planning and Analysis, Novolex (formerly Hilex Poly)) |

1. Company vision statement and mission
2. What does company do, value proposition
3. History/milestones
4. Financial projections, how will get there (high level)
5. Organizational chart
6. Competitive environment, place in that environment
7. Customer base
8. Supply volatility, how managed
9. Import competition
10. Key value creation items (more detail than 4.)
11. Market growth forecasts (independent source)
12. Sustainability initiatives
13. M&A strategy, if applicable
Appendix: Detailed financials (P&L, balance sheet, cash flow)

Topic Expert
Peter Freeman
Title: Chairperson - Clean Tech Committee
Company: Keiretsu Forum - Angel Investors
(Chairperson - Clean Tech Committee, Keiretsu Forum - Angel Investors) |

I am both an entrepreneur and angel investor, so can view this from both perspectives. These replies are quite good, comprehensive and well said. I will add a couple of thoughts.

First, the comment about getting investors attention in the first 60 seconds is critical. Why should I care? A standard approach, a cliche in many ways, is to present a problem or pain point your company will resolve. It's also better, in my view, to appeal to the audience's heart rather than to their bank accounts in the initial pitch.

I can also agree strongly that you need to present a clear business model, explanation of how the enterprise will make money, sources of revenue. That is not always so clearcut, and there are often alternatives.

Another standard part of the pitch is the exit strategy, how can the investors expect to capture the opportunity from a (future) liquidity event. There are a couple of standard approaches. Some investors prefer a fairly specific statement - "we plan to do an IPO in 4 years that will provide the investors a 10X return". My own preference, and this is probably a minority view, is to say something like we are trying to first build a great company. If we are successful, then there will be a happy ending, such as an IPO but more likely a sale to a larger company, an M&A transaction, which will reward all of us handsomely.

Finally, one of my pet peeves relates to presentation of competitive advantage. You do need to describe what makes you different relative to the competition, but I often hear entrepreneurs say "we have not competition". NOT TRUE, there is ALWAYS competition, including to keep doing what the customers are already doing. When I hear that, I jump to the conclusion that the team is naive and I would never invest, and others I work with say the same. Again, this may be a minority view, but I want to provide my two cents worth.

Ricardo Small
Title: SVP - Middle Market
Company: Comerica Bank
(SVP - Middle Market, Comerica Bank) |

Having spent some time in the pitching side of the world, I'd like to suggest you follow the money... So, if you want to know what to put in a VC pitch deck, ask the VC.
With that, I want to refer you to Fred Wilson's fantastic blog post: http://avc.com/2010/06/six-slides/
Fred has an entertaining and extremely insightful blog on what VC's do and like...
Good luck!

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