Most great business ideas fall by the wayside because of a lack of funding. And the question one might ask is why — if the idea is great — do investors not end up backing a startup?
Simply put, arranging seed funding is no cakewalk. Besides a strong idea, startups also need to have a powerful pitch deck to impress seed funding investors. And each deck requires meticulous work and revisions depending on the investors being pitched to.
What Is A Seed Funding Deck?
The first thing founders need to understand is that a seed funding pitch deck differs from other presentations. It makes the first impression of the startup. It is a brief presentation that a founder or entrepreneur presents to potential investors, partners and cofounders to give them an overview of the business plan at the early stage as well as the roadmap and plans for the future.
The objective of the pitch is to bring investors on board for seed funding, which will be the foundation for the new company. The seed funding pitch deck is mostly created using common software such as PowerPoint, Prezi or Keynote, but one can also use Adobe Indesign to create impactful presentations – whether for in-person pitches or virtual presentations.
There are a lot of things to keep in mind when making a seed funding deck. These include certain things that should be part of your deck and some that should be avoided at all costs. Seed stage investors are very particular about their time so your seed funding presentation should be concise but also have all the necessary details that an investor would need.
But naturally many first-time founders and new entrepreneurs may have plenty of doubts about how to approach investors for seed funding. Here are some dos and don’ts to keep in mind while forming a seed funding deck for the perfect presentation:
Dos — Things To Do In A Seed Funding Pitch Deck
Know Your Target Audience
Before going into the presentation, it’s necessary to do some research on the investor and what they might be looking for. Take a look at their track record and what kind of startups they have backed in the past. This way, startups can assess investor needs and create a deck accordingly.
Narrate an engaging story that appeals to investors emotionally. If you have an interesting story and they connect with the same, your chances of getting funded increase drastically.
Focus On The Presentation Core
Try to explain the idea clearly, the aim and vision of the startup, the strategy to reach users and milestones at the beginning of the presentation. The rest of the pitch can delve into the details of the market opportunity and the business in detail.
One Idea Per Slide
Focus on only one idea in each slide to keep the design of the deck minimal. A lot of different information in a single slide can confuse investors and make them lose interest in the pitch. Keep investor attention confined to the point by limiting content on each deck.
Consistent Theme And Design
All slides need to have a consistent theme which extends to fonts, the colour scheme, the size of icons and boxes, and text formatting throughout.
Don’ts — Things To Avoid In A Seed Funding Pitch Deck
And here’s what not to do in a pitch deck:
Don’t Read The Slides
The pitch deck is not a teleprompter and it would be a grave mistake to assume that investors aren’t paying attention to the deck. Let the slides speak for themselves — the founders need to expound and build on the idea being presented.
Don’t Boast Or Brag
Try not to make the pitch into a commercial about the startup. Investors also want to make money from their investments, so the goal is to bring the potential of the idea to the fore. Don’t boast about the company or idea; let the numbers do the talking.
Keep It Short And Snappy
Obviously, startups might have a lot of information to convey to let investors, but the trick is to know what to say, and what to leave for after the presentation. The pitch usually continues beyond the presentation through open discussions, so the funding pitch deck itself needs to be brief and to the point.
How To Make The Perfect Funding Pitch
A perfect seed funding proposal consists of not more than 12 to 13 slides that follow a certain order. Here is how startups can build a proposal for seed investors:
- Intro slide
Introduce the business idea. Three things that should be available on this slide are:
B. A motto or a one-liner
C. Contact information
The vision can be a one-liner or even an image that founders elaborate on in person. It shows why the company was created, and why the market needs it.
This slide tells investors the problem that the startup is trying to solve. Founders and pitch makers will also have to prove to investors that the problem is worth solving in the context of the market.
After stating the problem, it’s time to emphasise the solution to the problem. This is crucial for all startups — no matter the sector or domain. The pitch deck needs to be specific about the solution offered, and why the approach is different from any competitors.
Telling investors about the product is one thing; the best part about a pitch is actually showing them any proofs-of-concept or a working prototype. For example, if it is a new product, show investors how it works while explaining a few important details about it.
- Business Model
How does a business or startup plan on making money — investors love to see how their returns will come in. Give investors a revenue timeline or roadmap and the path to profitability.
- Market Opportunity
In this slide, talk about the total addressable market (TAM) which signifies the revenue opportunities for a product. Let them know about the size of the market and its availability. Also, explain the channels being used to reach the market along with the distributors or vendors that will be used by the startup to reach the market.
A startup also has to contend with pre-established players that are working on the same or similar problem. Inform investors about the competition for market share and the competitive advantage for the startup. Make them realise how the product or idea is different and/or stands out.
- Case Studies And Testimonials
Evidence in the form of traction or customer testimonials is a necessary step when seeking seed funding. It shows that your business model is working and that the market is responding to it.
The slide must include a roadmap marking the significant milestones that the startup has achieved and the landmarks that it wishes to achieve in the future.
- Team And Leadership
Give investors some information about the team and the leadership behind the idea. It’s important to highlight achievements as much as possible, without entering the bragging territory.
This is where startups need to specify the range of funding. Put the requirement on the table and wait for counter offers from investors, if any. It’s also essential to specify where the funds will be used by the startup.
- Contact Information
This slide is just to close the presentation, leaving investors with your contact information, website’s URL, e-mail address and more.
When thinking about how to approach investors for seed funding, make sure the seed funding deck follows the above-mentioned guidelines. After getting these in order, all a founder needs is confidence to go forward and make the pitch.