A good-looking pitch deck and a pitch that secures investment are not the same thing. Angels value substance over style, although style on top of good content never goes amiss. The key to a good pitch deck, what actually gets you a yes, is the argument underneath the slides.
What angels are evaluating.
The problem, and why it's urgent enough that enough people will pay to solve it now, not eventually. You will struggle if you cannot succinctly, accurately and convincingly describe how life will change for customers with your product, you will not only struggle to get angel interest, you will struggle to sell. Vague problems for vague customers get vague interest.
Why you, specifically: everyone says they have an experienced team. What makes the difference is that your team has experience in this domain, has execution capability and (and don’t underestimate this), has a real (but not blind) passion for building a successful business. Starting a business is one of the hardest things you will do, so if you don’t believe in what you are doing, you will fail.
Evidence of interest, even early. Traction doesn't have to mean revenue at pre-seed. It can mean customer interviews, a waitlist, a pilot, usage data from a prototype. What it can't be is assertion with nothing to back it up. That will just make you look like a dreamer, not a businessperson.
The growth model for the business and how it makes money. How will you sell? How will you produce? What will the margin be? Angels don’t expect a week-by-week plan but not being able to show the key milestones is a red flag.
The ask, and a specific use of funds. “£300,000 to grow sales” is weaker than a plan that shows what the money actually buys and what changes because of it. Your plan should be able to show angels where their money is going and what will change as a result of it. Monthly for the first year then quarter by quarter is usually sufficient.
When does the money run out. It's highly likely that your business will need more investment. Understanding when this is and how the next round of investment will be raised shows angels you are thinking long term. Cash, or specifically lack of it, is the biggest killer of a growing business. I have passed on several potential investments because the entrepreneur has asked for too little.
The exit path: it matters not because founders should be building to sell, but because angels need to understand, at least in outline, how they eventually get their capital back. And remember, it’s their exit not yours. There may be future funding rounds that give the angels an exit even though you and the business continues.
What's usually missing
In a mistaken approach to present a perfect picture, the first mistake entrepreneurs make is not to clearly articulate the risks the business faces and what you're doing about them. Founders who name their risks read as more credible, not less. Investors are going to find the risks anyway, during DD if not before. Naming them first signals you understand your own business better than a founder who pretends there aren't any.
The pitch that works
The best pitch decks tell a story: a story of why, what and how. A deck that's just “here's our product, here's our market, here's our team” as three disconnected sections reads as list and fails to engage.
The core of the narrative, and the part many founders skip, is not just what the problem is, but why you see something about it that others have missed: the reason you're the one who uniquely solves it. This problem first perspective demonstrates your deep understanding of customers, which is the platform your business. It provides the scaffold for the rest of your pitch.
One practical test before your pitch must pass: could someone who's never met you explain, in two sentences, why this company and why now? If the answer isn't obvious from your deck, the argument isn't made and no amount of slide design fixes that.
Remember
A pitch deck is a sales deck where you, your team and the business are the product. Like the best sales decks, it should engage both heart and head. The heart is your passion, belief and determination: the head is your financials, plan and market. Psychology tells us the power of the heart in decision making, even in what people think of as rational issues, like investment. As the saying goes, it’s about winning hearts and minds. Make sure your story has both!
David Jackson, Founder and CEO, Certitia