What Is a Pitch Deck? A Comprehensive Guide for Entrepreneurs

A pitch deck is a visual presentation you will give to potential investors to convince them to support your business. Whether you are meeting with angel investors or venture capital firms, you will need to make a strong case for the viability of your ideas. If your presentation goes well, you could secure thousands of dollars — or millions, if you pitch venture capitalists — in financing. This money can be used to launch your business or expand your operations.

Pitch decks are valuable in business because they add visual elements to your persuasive arguments. You can share mock-up photos of products, graphs projecting growth, and charts for how you plan to use the funds. These decks allow you to clearly communicate ideas about your business.

Use this guide to learn how to make an effective pitch deck with all the key components investors expect.

Key Components of a Pitch Deck

Investors have a clear idea of what they want to see in your pitch deck. Including specific elements allows you to walk them through your business model and the details of your operations. Here’s what you should build into your presentation.

Problem Statement

The problem statement highlights the issue that your business will solve. To effectively communicate your problem statement, consider what your audience already knows about the issue. If your problem addresses a highly technical concept, you may need to discuss the issue further before you provide a solution.

Your problem statement is meant to hook investors, so consider using a powerful statistic or emotional anecdote to engage your audience. You want them to see that this is a serious issue.

Solution

After you lay out the problem, introduce the solution. Your product or service becomes the hero that saves the day, offering a better option than anything else on the market.

When presenting your solution, introduce the idea clearly and concisely. Your investors can ask for more details if they need them or you dive into the technical aspects of your solution later in the pitch.

Market Opportunity

The market opportunity represents your potential profits. Investors expect you to quantify your market opportunity to give them an idea of your revenue goals. A good starting point is third-party research and data, which reflect the state of the current market. Start by reading financial reports and business insights online.

For example, if you have a product that supports remote work, you would highlight how 22 million Americans work outside of the office. If 2% of remote workers bought your $100 product, it would be a $44 million idea.

Product or Service

This section allows you to provide in-depth information about how your product or service works and why it’s valuable. As you create this part of your pitch deck, focus on the unique selling points of your product or service. Explain what sets it apart from your competitors and what makes it better.

Business Model

Once you sell investors on your product, you can pivot to your business operations. A business model is how you plan to run your company and turn a profit. For example, Netflix has a monthly subscription business model while Starbucks uses franchising.

Your investors want to know that your business model makes sense for the market or is disruptive enough to stand out.

Traction

Traction refers to the progress your company makes to grow customers and expand into the existing market. You can highlight traction by setting milestones for growth and reviewing metrics you intend to track to measure success.

For example, you can set a goal for the number of new customers you want in the first year while also tracking customer retention. This highlights curiosity about your product and the value it provides.

Marketing and Sales Strategy

Next comes your marketing and sales plan. Tell your investors how you intend to drum up excitement about your product or service, whether it involves attending trade shows or promoting your brand on social media. Start by developing a detailed marketing plan and then identify the most important elements that need to be included in your pitch deck. If your investors have detailed questions, you’ll have answers.

Team

This section highlights who you plan to hire to execute your business plan. For example, an entrepreneur with an app idea would need to hire a developer. They might also need a marketing expert to promote the tool and attract customers.

In this section, list each member of your team and potential plans to hire more people in the future. This highlights your growth plans and scaling strategy.

Financial Projections

Use forecasting models to track your potential growth and financial outlet in the next few years. Know that your expenses will grow with your profits. As you acquire more customers, you will need more team members to provide support and may need to expand your operations to a larger facility.

While you want to paint an optimistic picture of your finances, try to present realistic and achievable goals to your investors.

Funding Ask

Once you have sold investors on your idea and used your deck to prove that you thought through your business plan, you can finally ask investors for money. Determine how much you need and highlight what the funds will be used for. You can also pitch your target repayment terms to show when your investors will see returns.

Investors might start to negotiate with you at this point. They might provide counter-terms they are willing to offer instead. This is good news. It shows your investors want to buy into your idea and believe in your business plan.

Tips for Creating an Effective Pitch Deck

Including all of the above elements is important, but you also want to present your pitch deck engagingly. Investors see pitch decks all of the time and can tune out your messaging if your presentation doesn’t hold their attention. Here are a few best practices to follow — and pitfalls to avoid.

• Don’t put too much information on your slides: Just like school presentations, overloaded slides are confusing and boring. Stick to one clear idea per slide.
• Balance engaging visuals with company details: Investors need to know that you have a sound plan for the money but also want to be told a story about your business and products.
• Tailor your deck to your audience:Research the VC firm you plan to meet with or learn about the values of angel investors. Focus your presentation on what they want to know.
• Leave space to answer questions: Pause between each slide to answer questions from investors and elaborate on details.
• Practice your presentation:Not only will this help you speak confidently, but you will also know what is coming up on your next slide.

A good pitch deck can help you win over investors and secure favorable terms for the funds. It’s worth your time to develop an engaging and comprehensive pitch. Make sure your deck has all of the elements listed above and lays them out clearly and concisely. Not only will you keep investors engaged during your pitch, but you can make them believe in your vision.