1871 Says: This post is part of the Hyde Park Angels Entrepreneurial Education Series, which brings together successful, influential entrepreneurs and investors to teach entrepreneurs everything they need to know about early-stage investment through events, articles, videos, and more. If you are interested in learning more about raising a round, save the date for “Early Stage Investment 101” on June 17.
Your pitch deck is one of the most important sales tools in your arsenal. It isn’t just your means of getting investors to back you, but the actual story of your business. And to succeed, you need to be able tell a compelling story. But how do you craft a compelling story that hits on all of your most important metrics and stays high-level and succinct enough to keep your audience’s attention?
Start by Explaining the Problem and the Pain It Causes Someone Really Important
Explaining the problem is key to selling your value to investors. If there’s no pain point they can understand, they’re not going to see your business as investable. It’s your responsibility to make them feel the pain.
That means defining a very specific pain and who experiences it. Remember, the “who” is as important as the pain — someone without buying power or the ability to adopt doesn’t make a compelling character in your story. Similarly, you need to show the market size of people with that pain. Otherwise, you can’t size the problem. If you shy away from presenting the market size because it feels too small, you probably need to identify a new “who.”
Finally, once you’ve explained the pain and who and how many experience it, focus on demonstrating trends that prove the pain will either last or keep on growing. A pain that’s about to disappear isn’t interesting to investors.
Next, Demonstrate How Your Solution will Solve the Problem
This is hands-down the most important part of your pitch deck, and certainly the most important foundational element of your business. You need to be able to communicate what you’re trying to do and why it matters.
Don’t be afraid to get anecdotal at this point. You shouldn’t go overboard with emotion, but the point of storytelling is to take your audience on a journey with you, not present disjointed business facts. One way to succinctly paint a picture that shows your solution’s value is to give examples that illustrate how it will easily change behavior.
Depending on what problem you’re trying to solve and how much of your solution is ready, a sizzling product demonstration may tell a better story than your own words could. Regardless of whether you do a demonstration, knowing the technical aspects of your product can reassure your audience that you know what you’re talking about, the technology works, and you have legitimately built it. Still, always remember the key question you’re trying to answer here is: how does this product solve the problem I defined earlier in the presentation?
You should build on this idea throughout the deck by focusing on key metrics.
For Example, Metrics Illustrating Traction in the Market
We already spent time defining traction and how to identify the best metrics to show it. Showing meaningful metrics that prove your product is solving a problem and changing behavior is a necessary plot point. Three metrics you should include are:
From there, you can progress into one of the most important parts of your story.
Why Your Solution is Truly Unique
Get into who your competition is, and why you’re better. Again, restate the pain and the people who experience it so you can point out how you can eclipse your competition and eat up their market share. In fact, you’ll want to demonstrate why you’re winning business away from competitors and how you will continue to do so even when your competitors ramp up to fight you.
This idea brings up a very important question: how much do you need to discuss the future?
Show a Roadmap of the Future Only if Absolutely Necessary
Your investors are thinking about the next 18–24 months before you raise again, not the next 10 years. Mapping up the future can take you down a dangerous rabbit hole that locks you into a path your audience doesn’t support, or even worse, gets you diving into the nitty-gritty of how you’re going to roll out every next step. It’s so important it bears repeating: concision is your best friend.
If you can’t stay concise discussing your roadmap, then just don’t do it. You should really only discuss your plans for the future if you believe it’s absolutely necessary for your story to make sense and resonate. If that’s the case, try sticking to these shorter-term points:
Still, while you should discuss your roll-out plan sparingly, discussing the future from another perspective will buy your audience’s attention and, if you do it right, confidence.
Namely, Demonstrate How Today’s Success Will Become Future Financial Success
Projections can be dangerous territory, with a lot of them coming off to investors as completely speculative. Your goal should be to build a solid financial model that shows your logic to investors. The output of that model is your projections, and those numbers will be contested from the start. But if you build a model that you can defend and discuss, you can just input the new numbers and show your investors that you understand your business. That will help you transition into the next part of your story.
How Your Business Will Be So Successful It Exits
Investors care about returns on their investments, which means you need to show them there is an opportunity for you to exit.
Start off by discussing acquisition. By now, you’ve told a persuasive enough story that acquisition seems like a no-brainer. Name a few potential acquirers and talk about which other businesses in your space have been acquired recently and for how much.
You can also reiterate that because your business is truly solving this very big, very important pain in the market, going public is always an option. You just shouldn’t discuss it as your only option.
Now It’s Time to Convince Everyone Your Team Is the Right Team
Your story only makes sense if you have the talent to execute your solution. Highlight your current management team and their experience, accomplishments, and expertise. You’ll also want to discuss your advisors as true experts in the market.
Finally, Show How Much Capital You Need to Be Successful
Keep this short and simple: how much are you raising and what it you will use it for. Don’t include terms in your deck, but be prepared to discuss them.
And Just Like That, You’ve Put Together a Deck…
That tells a convincing, compelling story.
About Hyde Park Angels
Hyde Park Angels is the largest and most active angel group in the Midwest. With a membership of over 100 successful entrepreneurs, executives, and venture capitalists, the organization prides itself on providing critical strategic expertise to entrepreneurs and the entrepreneurial community. By leveraging the members’ deep and broad knowledge of multiple industries and financial capital, Hyde Park Angels has driven multiple exits and invested millions of dollars in over 30 portfolio companies that have created over 500 jobs in the Midwest since 2006.
About the Authors
Alida Miranda-Wolff
Alida Miranda-Wolff is Associate Manager at Hyde Park Angels. Her role includes creating and executing marketing and communications strategies, planning and managing events, fostering and maintaining community and industry partnerships, and managing membership. Prior to joining Hyde Park Angels, Alida served as a manager, data analyst, and publication specialist at a multibillion dollar industrial supply corporation. She has lead two of the most successful Kickstarter campaigns in Chicago history and worked with half a dozen startups in various marketing, content creation, and project management roles. Alida believes in creating valuable, spreadable multimedia content, and has done so as a freelance writer for several print and online publications.
Michael Sachaj
Michael is the Associate Director of Hyde Park Angels. He leads HPA’s investment opportunities through sourcing deals, conducting due-diligence, and providing oversight of the University of Chicago Booth Associate team. Michael joined Hyde Park Angels after spending three years as a strategy consultant with Booz Allen Hamilton in Washington, D.C. where he worked on a variety of process and customer service improvement efforts. He earned a BA in Political Science from Northwestern University in 2009.
Pete Wilkins
Over the past two decades, Peter has successfully founded, built, and turned around companies in the education, healthcare, and technology industries. He has also leveraged his entrepreneurial experience to help build one of the largest and most successful angel investor groups in the country.
Peter currently leads Hyde Park Angels (HPA) as the managing director. Prior to HPA, he co-founded New Futuro, a socially innovative education company helping Latino families get their students into college. Before New Futuro, Peter worked with KKR Capstone (KKR’s operations group) as President of PRIMEDIA Healthcare, where he turned around the company from record losses to record profits and built one of the premier online physician education communities. Prior to PRIMEDIA, Peter successfully served in senior sales and marketing roles for two technology startups that collectively sold for more than $2.8 billion. Peter holds a degree in business from Indiana University and graduated from the University of Chicago Booth Executive Institute.
Peter is passionate about inspiring and developing current and future startup leaders. He believes when entrepreneurs lead with purpose as their best-selves they improve their lives, their companies, and the world in incredible ways. Peter serves on a number of company, venture capital and non-profit boards and is an active advisor to many entrepreneurs. He also frequently speaks about entrepreneurship, as well as providing tailored solutions to executives and companies through the Omaxen Group.