After an entrepreneur gets a million-dollar idea — but before an investor cuts them a million-dollar check — there is a pitch deck.
There are other things too, of course. Meetings. Spreadsheets. Handshakes. Signatures. All the due diligence that transpires before startups secure investments.
But the pitch deck is where founders and entrepreneurs make their first impression. It’s their big chance to showcase their bright idea. The teaser trailer that leads to a ticket purchase, the Tinder bio that prompts a swipe right. Only in this case, it’s a PowerPoint.
What Is a Pitch Deck?
Mike MacCombie, director of platform for ff Venture Capital, reviews about 60 or 70 pitch decks a week, sometimes more. In a typical year, his investment firm looks at a couple thousand or so decks. But lately, he said, that number is more like 5,000.
Lots of startups are angling for investments, which means: lots of pitch decks.
The data bears this out. DocSend, a secure-document sharing tool popular in the startup world, published internal data about deck usage on its platform. So far in 2021, investors are looking at more decks than they did in the previous three years.
But they are spending less time with each one — under three minutes a deck, on average. Compare that to two years ago, when that figure was closer to three-and-a-half minutes spent reviewing each deck.
Startup leaders looking to stand out from the crowd and catch the eyes of investors have their work cut out for them — not only when it comes to building their companies, but in creating their decks too.
Pitch Decks Are for Getting Meetings
Deals are virtually never made the moment investors finish reviewing a pitch deck. So the purpose of them isn’t actually to get an investment. It’s to get a meeting.
Jason Heltzer, managing partner at the venture capital firm Origin Ventures, told Built In that many founders make the mistake of trying to explain too much in their pitch decks. They treat it as if it’s the whole conversation, when in reality, it’s just the start of one.
“You’re trying to arouse some excitement, some interest, some passion in this investor to be part of [your] mission,” Heltzer said. “Is there a point in the process where you’ve got to provide a lot of detail? Sure, but it’s almost never that moment where you’re trying to get a meeting. It’s usually not that first meeting either.”
The goal to get a meeting, not an immediate investment, ought to take some pressure off founders who feel as though they need to cram every data point into their decks. The truth is, they only need to include enough information to cause investors to sit up in their chairs.
“And you don’t need 50 slides with an appendix to do that,” Heltzer said.
At the same time, decks shouldn’t be so minimalist that they leave basic questions unanswered. A deck with information gaps in it, no matter how compellingly made, still puts founders in the awkward position of having lots of explaining to do when it comes time for a meeting. Not a great place to start from.
“If it gets to the next meeting, and [investors] are not coming in saying, ‘Wait, before we start, these are the five things that I didn’t get,” MacCombie said, “that’s all you need.”
What to Include in a Pitch Deck
With some exceptions, pitch decks typically range from 10 to 15 slides and include the same basic elements:
Title: What is your company name, logo, tagline?
Problem: What is the consumer pain point you address? Why is the world a lesser place without your product or service in it?
Solution: What is your solution for the pain point? How does your product benefit users?
Use Cases: How does your product work? What does it look like in action?
Business Model: How do your economics work? How do you acquire users, or generate revenue?
Traction: How have you demonstrated product-market fit? What is the proof that customers really like you?
Market: How big is the opportunity? How many customers might be interested in what you offer?
Competition and Competitive Analysis: Who are your competitors? What do you do differently? What is your competitive advantage?
Vision and Forecast: What is your plan for business growth? What steps do you need to take to get big? What is your projected trajectory?
Team: What is management’s background and experience? Why are you the right person or people to lead this company?
Use of Funds: How much money are you trying to raise? What are you going to do with it?
Not every deck needs to precisely adhere to the above structure and order, but investors have come to expect decks to more or less cover that ground.
Heltzer guesses he’s seen tens of thousands of pitch decks over the course of his career, most of them sticking close to the classic format. Monotonous? Maybe. But useful, considering he only has time to spend a few minutes reading each deck before deciding if the idea warrants a follow-up meeting.
It “helps us understand these businesses faster,” he said.
The deck structure might be tweaked depending on the stage of the company though.
For startups that just launched, for instance, decks might spend more time on the problem and solution, fleshing out the core idea. They might also discuss traction less because the product might not be brought to market yet or there isn’t enough data to make accurate forecasts about growth.
Decks for companies that have already raised a couple of funding rounds or that have been around for a few years, though, might focus a bit more on traction (like showing monthly active-user growth, for example), or outlining future plans and projections.
Some startups might want to emphasize the founder’s experience in the deck too — especially if their expertise is intertwined with the core idea of the product.
Pitch Decks Should Have ‘CRCL’
Before he got into venture capital, MacCombie cut his teeth as a fifth-grade school teacher and a behavioral consultant for Fortune 500 companies. Needless to say, he’s spent a lot of time thinking about how to craft emotionally compelling stories. He knows what gets people’s attention.
So in addition to covering the basic information outlined above, MacCombie recommends that founders making pitch decks keep in mind the acronym CRCL (pronounced “circle”):
Coherence
Resonance
Cognitive Load
Coherence
MacCombie said a lack of coherence is one of the most common mistakes he sees made in pitch decks. Many of them read like 15 disparately connected slides.
“[But] the best, most coherent decks tell a singular story.”
The reason, he said, is that investors often summarize pitches to their partners. But it’s easy to forget much of the content and the meat of the story can come across as disjointed and get lost in translation.
Coherent pitch decks — ones that have a strong narrative flow, a simple, long-bending arc — can withstand the game of telephone.
Resonance
The goal of pitch decks is to get investors to sit up in their chairs, to land founders a follow-up meeting. To do that, pitch decks have to be emotionally resonant.
Simply listing a bunch of features and moving from slide to slide without smooth transitions yields a clunky experience though — and limits emotional resonance. The structure and delivery of the slides have to grab investors.
MacCombie suggests founders pick the three most important things about their company and make those into multi-slide narratives.
Those narratives, taken together, should still contain all the essential ingredients of a deck, but just bundled together in an emotionally resonant package with a clear through-line.
Cognitive Load
Sometimes MacCombie comes across decks with 15 bullet points listed on one slide.
“It looks like a menu at an all-night diner,” he said. “You don’t know where your eyes are supposed to go.”
Even if the information is compelling, too much of it can exhaust and overwhelm time-strapped readers.
If investors don’t immediately know what each slide is about when they peek at it for a few seconds, “you’ve lost them,” MacCombie said.
He suggests founders reduce the cognitive load.
It can be done by limiting each slide to 10 words or less — ruthlessly evaluating where you can turn five words into two words and where clunky phrases can be swapped out for simple illustrations.
In addition, each slide should forego having a title at the top — like “Problem” or “Solution.” Instead, each should start with a topic sentence. So “Team” becomes “My team has 5 years of experience doing X.”
Those topic sentences should be the main thing investors remember about the slides, he said. And everything after that should just be a few points that make the claim credible.
Does the Pitch Deck Design Matter?
Kevin Hale, a former partner at the startup accelerator Y Combinator, wrote that pitch decks should be legible, simple and obvious.
Legible means decks should use largely sized and bold fonts. Hale suggested starting with Helvetica Bold 100-point font.
Simple means decks should convey ideas that don’t intertwine with other ideas. Hale gave the example of Afrostream, for which the early version deck said the company was “a subscription video-on-demand service, which provides an unlimited access to African, African-American and Caribbean movies and TV series.”
When it came time to pitch, the startup simplified it to: “Netflix of African and African American content.” Much simpler.
Obvious means slides can be understood at a glance. Even illustrations, graphs and flowcharts need to be stripped down to their most basic, glanceable parts.
When it comes to particular presentation software, pitch decks are often created using PowerPoint and Keynote, both of which have been around for years.
But some people, like VC Marren Bannon, wonder if the traditional pitch deck format is dead.
Lately, some founders have been experimenting with newer formats — like Notion pages, Loom videos and Figma designs — to stand out from the competition and persuade investors.
Founders of the fintech startup Argyle used Notion, the workplace collaboration tool, for their pitch deck. They sent investors a long-scrolling page with clickable sections that contained additional information. And they partly credited the unconventional format for helping grease the wheels and clear common fundraising hurdles.
“It completely changed the start of a conversation,” Billy Marsden, one of Argyle’s founders, told Protocol. “You were having a conversation with a VC that you normally get to in hour four or hour six with them, but at the beginning of a phone call because they had gotten clarity on the business.”
Argyle ended up raising $20 million.
“We’ve received pitches in pretty much any form you can think of.”
“We’ve received pitches in pretty much any form you can think of,” Heltzer said. “I’m excited for some of the new formats.”
Heltzer is bullish on video, in particular. He said it helps demonstrate the founder’s passion for the company and helps the investor feel more connected to them. Plus, it’s easy for capturing a quick demo of the product in action.
But Heltzer is not convinced video — or any newfangled format — will completely replace the traditional deck. Especially in today’s deal environment, in which investors are overwhelmed with potential deals, relying even more on the ability to quickly flip through the tried-and-true deck to see if a startup is a potential fit.
Lolita Taub, a co-founder and general partner at The Community Fund, told Built In that the traditional pitch deck is not dead. But other formats are welcome.
“The key to a pitch is not the medium used, but rather the content,” she said. “Note to founders: Lean into the medium that helps you better communicate.”