What is a Pitch Deck and Why it is Important for Startups

Pitch deck is the most commonly used word in startup jargon. Entrepreneurs need to showcase their startup’s story to potential investors like angel investors and venture capitalists, to get funding for their venture. An engaging pitch deck is essential to capture the attention of the investors and convince them to work with your idea. But what is a pitch deck?

What is a Pitch Deck?

A pitch deck is a visual document that provides a brief but detailed overview of a Startup company. It is a collection of several slides that showcase the startup’s story to potential investors, customers, co-founders and partners. As the name suggests, it is mainly used to pitch a company to the investors and attract their interest.

The presentation aids investors to get to know about the business and make an informed decision. The pitch deck should contain information such as the business plan, the problem and solution, details of products/services,  target markets and marketing strategies, financial goals, valuation metrics, and funding requirements.

Importance of a Startup Pitch Deck

Pitch deck is also known as a slide deck because it is a collection of slides that can be organized based on the forum it is being presented to. It is also known as a startup pitch deck or presentation deck. Creating a pitch deck is the first step in the funding process for a startup.

The pitch deck is the first tool used to communicate with potential investors. It can be altered to suit the medium of presentation and portrays the story of the startup in a crisp and engaging manner. The objective of a pitch deck is to build trust about the viability of the company and convince the investors for further negotiations.

Pitch Peck vs Elevator pitch

An elevator pitch is a brief way to introduce your startup. It is known as elevator pitch because it is how quickly you have to introduce yourself to someone,  within the short span of riding in an elevator. An elevator pitch should be hardly 30 seconds and must give a crisp introduction of your startup in a sentence or two, to  motivate the listener for further engagement. An elevator pitch can be used as an introduction slide in the pitch deck to introduce the startup to the viewers.

Components of a Pitch Deck

A pitch deck must consist of 18 to 20 slides that portray critical information about the startup in a clear and captivating manner. Investors spend very less time viewing a pitch deck so it should be short, engaging and to the point.

Every pitch deck is different and so are the components of it. The components of your pitch deck depend on the reason why you are preparing it, industry standards and other factors. The slides of the pitch deck can be arranged according to the viewers it is presented to. However, here are some essential components every pitch deck must include. Let us understand these components with the example of the airbnb pitch deck.

  • Introduction – The first slide of a pitch deck should introduce your company to the viewers. It should provide a brief picture about the startup. The slide should consist of your startup’s name and a short text about what the business is.  For example, in the airbnb pitch deck, they introduce the company with a simple sentence “book rooms with locals instead of hotels”, which showcases the gist of the company.
  • Problem – The next slide should talk about the problem that you intend to solve. Discuss the problem faced by the customers or the customer need that you target to fulfill with your product/service. You should not make the slide lengthy discussing everything about the problem. Use a couple of sentences to clearly explain the problem and the need to solve it.

The airbnb pitch deck highlights the problem in three simple sentences. They highlight the main problems faced by travelers while booking hotels online, i.e the price and the location of the hotels.

  • Target market – The target market is the specific group of people your products or services are targeted for. The pitch deck should specify the target market and its size. Investors need to know the growth potential of the startup before making the funding decision and this slide will help to convince them that your idea will be in demand and the startup will succeed.
  • Solution – This slide should present your solution to solve the customer problem or need. You should describe how your idea will solve the problem or the unfulfilled need of the customers. It is essential to note that you have to talk about the benefits of using the product instead of describing its features. You should also show them how you will make money or which business model you will use to earn revenue from the idea.
  • Validation -Investors need to know whether your product is the right fit for the market. They need to see proof that your idea will be viable. Early stage startups must include some type of idea validation to prove their viability. However, if your business already has some customers, you can also use testimonials to prove your claims. You can also use photographs, screenshots and demo videos to enable viewers to understand your idea clearly.
  • Competition – No matter how innovative your idea is, there is bound to be competition in the market. You have to talk about your competitors and how your idea is different from them. This slide should showcase why customers will choose your product over your competitors.
  • Marketing strategy – Though the idea looks great on paper, acquiring actual customers is a difficult task for startups. Your investors need to know that you have a strategy in place to approach and convince customers to pay for your products/services. This slide should outline your marketing and sales strategies and how they are different from competitors.
  • Team – Investors are most likely to fund firms that have an experienced team. Introduce the key members of the team, their experience in the industry and their achievements. This slide should talk about the founders, co-founders and other critical members of the team and how their contributions can benefit the startup.
  • Financial projections– Investors are keen to know about the financial projections of the startup before funding it. It is crucial to show them 3 to 5 years of financial projections that include income statements, growth estimates, etc. Instead of using plain numbers, you can choose pie charts, graphs and other visual elements to make the slide interesting. The below slide shows their business model and estimated revenue projections based on the targeted market share.
  • Funding requirement – The reason why you are preparing the pitch deck is to ask for funding. Mention what are your funding requirements and how the fund will be used to propel the startup towards success. This will help to build trust in the investors and convince them for further negotiations.

Pitch deck is an important tool for startups. It helps to communicate with investors and convince them for further negotiations. A pitch deck has to be concise and showcase the startup story clearly.

Reader’s Insight

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