Venture Capital (VC) funding is a crucial step for many startups. However, you must have a compelling pitch deck for VC to attract investors’ attention. It is a concise presentation that tells your startup's story and convinces investors of its potential.
But have you ever wondered how VCs actually score a pitch deck? This is what this article unveils. It explores the key pitch deck evaluation criteria that investors use to assess your business idea. Learn the basics of how to pitch to VCs and how to get the best pitch score!
You may have done a lot of hard work before you actually dared to approach investors. You have built a prototype, gotten a team together, maybe even restarted after painful failure, made thorough market research, and are ready to scale now. However, you need money for it. Naturally, you think about involving some investment. So, it is time to create a thrilling pitch deck and secure funding. Sounds logical and simple, right? But remember, you have just 1 chance in 100 to succeed!
Investors are bombarded with ideas. And you have literally minutes to grab their attention. Your presentation must step well beyond visual appeal and design aesthetics. It must act like an appetizer that evokes an investor’s appetite. A good pitch deck works in three directions:
A strong pitch deck showcases the core elements of your startup – the problem-solution fit, the market potential, and your team. The key task is to entice the investor to dive deeper.
VCs invest not because they want to let your startup grow but because they want to earn. The pitch deck is a chance to translate your vision into their language. Highlight how your startup is going to bring them money.
Do not overload your presentation with details! Show only the juiciest bits and leave the intricacies for later.
VCs have their own pitch deck evaluation criteria. Roughly they are looking for two major things:
The market is full of ideas, but VCs are interested in high-growth businesses with the potential to generate significant returns on their investment. When you present your idea, they will immediately want to know how exactly your solution will generate income and why you are better than competitors.
A strong financial model is essential for any startup, as well as a team that stands behind it. VCs invest not only in ideas but also in people. They want to see reliable people with skills and passion for business.
So, you must know your VC’s “investment thesis” before meeting them. It will allow you to analyze your pitch deck through their eyes and identify its strong and weak areas.
There are no strict rules regarding slide layout and organization of a pitch deck. Typically, it includes 10-12 slides. However, history knows unique examples of pitch decks. For example, Duolingo, a popular platform for language learning, had a presentation of 44 slides! At the same time, Intercom, a customer communication platform, could succeed with only an 8-slide pitch deck. Still, the perfect pitch deck structure should include:
It must hook investors with a captivating opening that introduces your company, its mission, and the problem you solve. This slide sets the stage for your story.
This slide specifies the problem your startup addresses. It must vividly illustrate the pain points your target audience faces.
Now, explain how you can become a hero! Present your innovative solution to the existing problem. The slide should show a clear value proposition.
Have you already gained customers, users, or any initial sales? Show traction and milestones you have achieved to build confidence with investors.
This slide shows how you generate revenue. Explain your pricing strategy, customer acquisition channels, and how you plan to get a profit.
It is all about your target audience, market opportunity assessment, and potential growth.
Provide a realistic forecast of your future financial performance. Offer a chart with a revenue and monetization strategy.
Explain how well you stand out from the crowd of competitors.
Devote this slide to your team overview and credibility. Demonstrate why you have the skills and experience necessary to turn your vision into reality.
Clearly state how much money you need and how you will utilize the capital to achieve your goals.
You may use additional components of a pitch deck if you believe it helps raise interest.
Facts and figures are important, but your pitch deck should also tell a compelling story. A high-quality presentation uses visuals, data visualizations, and a clear narrative arc to engage investors make your startup idea memorable. Before you rush to a meeting with an investor, take time to conduct design and content relevance analysis. Here is a short guide on it.
Find out more about your potential investors. Once you know what excites them, you will know what content and visuals they will appreciate.
Craft a clear narrative. Start with the problem, introduce your solution, highlight the impact, and end with a clear call to action and next steps.
Use high-quality images, graphics, and icons that are relevant to your message. Avoid clutter and keep your pitch deck visually engaging.
Maintain a consistent visual style throughout (colors, fonts, logos). Maintain a logical flow through your story.
Present data clearly. Utilize charts and graphs that are easy to understand and support your key points.
Remember about clarity and conciseness of information. Your message should be laconic but impactful.
Overall, every single slide should contribute to your business narrative to sell it.
Putting together a universal assessment manual for all business niches is a struggle; however, you may use the checklist below to score your pitch deck across various aspects. Give yourself 1-5 points for each criterion, with 5 being the best evaluation mark.
Add 5 points for a clearly defined problem and another 5 points if there is a large market need for it.
Add 5 points if you have a workable solution to the problem you highlighted and 5 points more if you offer a clear and differentiated value proposition.
Does the team have enough skills to realize the idea? If so, add 5 points. Do you have a go-to-market strategy? This adds another 5 points to the score.
Add 5 points if your startup has achieved any initial sales. If you have realistic financial projections, add 5 more points to the score.
Are your slides clear and informative? You earn 5 points. What about the design? Add 5 more points for professional and appealing layouts.
Overall, your pitch deck can score 50 points. If your score is lower, you can immediately identify weaknesses and eliminate them. This approach can increase your chances of success.
Evaluating your pitch deck can be a powerful exercise. The above tips can provide valuable insights into how your presentation will be perceived by potential investors.
Remember, a compelling pitch deck is a key success factor in fundraising. However, even the most diligent self-evaluation might miss a crucial fact or overlook that particular detail. Consider a professional check - expert designers can add those missing strokes that elevate your pitch deck. Contact the DreamX team to transform your pitch deck into a powerful tool that opens doors!
How to evaluate a pitch deck?
Alexandr is the founder and CEO of DreamX, a company transforming the digital design landscape. Under his guidance, DreamX consistently delivers innovative and user-focused UX/UI solutions.
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