If you are looking to pursuade investors to fund you SaaS-startup, you will need a Pitch Deck. What is a Pitch Deck? What info should be in it? And how do you write a winning Pitch Deck?
There are many ways to fund your SaaS Startup-company. We wrote an article about 7 ways to get funding for your SaaS-startup last year. Unless you chose to bootstrap your startup SaaS-company, you will need to find a way to convince others about your vision.
Most investors won’t fund your plans unless they know what exactly it is you are doing or how their investment is going to make them rich(er). You need to be able to quickly communicate how your company adds value, and you will need to present a business case.
The best way to get investors on board with your plans is to wow them with an impressive Pitch Deck. A well-crafted Pitch Deck gets investors excited about your plans and makes them eager to join the project.
What is a Pitch Deck?
So, what is a Pitch Deck, exactly? Perhaps the simplest definition can be found in a Forbes article from 2018: “The pitch deck is a presentation that entrepreneurs put together when seeking a round of financing from investors.” The article continues that ideally, a Pitch Deck consists of 19 slides or less.
A slightly more elaborate definition is that a Pitch Deck “consists of a careful arrangement and analysis of the investment of the (…) business and (..) presented to investors and potential investors with the intent of providing them the information necessary for them to make a decision to buy or invest in the (..) business.”
A Pitch Deck won’t make them invest
It would be easy to read the last paragraph and come to the conclusion that the Pitch Deck is the one thing that will secure all the funding you need. Obviously, this is the reason why you’d write a Pitch Deck.
However, securing funding is a long process, and getting potential investors to read your Pitch Deck is just a single step. Don’t expect them to just hand over a suitcase of money just because you made an amazing Pitch Deck. You wouldn’t expect them to wire you a million dollars based on your elevator pitch alone, so why would you expect it from a 19-slide Pitch Deck? Your goal right now is to wow them, get them interested, and ensure that you will get another meeting.
Keep it simple
You know every little detail about your plan. You’ve been working on your SaaS for months, maybe years. But for potential investors, your company is new. Steer clear from all the details, and keep it simple.
Make it appealing
If you make your presentation a wall-of-text, your investors are probably not going to like it much. That’s why using bullet points is so popular in business.
But seriously, bullet points are also extremely boring.
Ensure your Pitch Deck is exciting and relatable. Use storytelling, instead of just presenting facts. Don’t limit yourself to the possibilities of PowerPoint, but unleash the power of modern presentation tools (such as these 6 free PowerPoint alternatives).
Keep your Pitch Deck honest
Don’t promise them the world based on exaggerated assumptions. Be honest in your assumptions. “If it seems too good to be true, it probably isn’t”, after all. If your projections are too glorious, investors will find them hard to believe, which does not help you get the trust you need.
Keep your Pitch Deck up to date
We hate to break it to you, but it is very unlikely you will get all the funds you need after your first pitch. You will probably have to perform several pitches. It may take some time. Ensure you frequently check your Pitch Deck to see if the info in it is still accurate and up to date.
Perhaps you used market data from 2019, but 2020 has become available? Update your Pitch Deck. Perhaps you’ve reached another milestone? Update your Pitch Deck. Perhaps something else happened? You get the idea.
Items each Pitch Deck should include
Investors tend to be busy people. If they give you some of their time, you should use it as efficiently as possible. That’s why a Pitch Deck shouldn’t be too long. As you are limited to 19-ish slides, you will need to make some choices on what to include, and what not to.
The following items are absolutely essential and must be included in your Pitch Deck.
Simon Sinek is an inspirational speaker who gained a lot of influence since writing his first book in 2009. According to Sinek, you should always begin with the “Why”. What is the reason you go through so much trouble to build a business? The stronger your vision, the fewer words you need to express it. Keep it short (tweetable) and simple to understand.
Why would your end-users be so thrilled about your company? How do you make their life better? Don’t just compare yourself to other companies. Sure, that might work, but investors are starting to get tired of claims such as “We’re the AirBnB for yachts” or “We are the uber for lawn mowing”. Also, these comparisons only work if your business model is actually the same.
It pays off to take some time to really think this one through. A good value proposition not only includes a good understanding of what you can deliver, it also requires a pre-existing understanding of your clients and their needs.
What Problem are you going to solve?
Talking of needs, your value proposition is going to fail terribly if you are solving a problem that nobody considers problematic. Create a slide explaining the problem and how it isn’t solved by current product offerings – or at least, not as awesome as you can solve it.
Don’t bombard your audience with facts, but tell them a story they can relate to. Use storytelling to create a connection between the investor and your SaaS product. Get your audience to agree with you that there’s a problem and they will be more likely to accept the solution.
Target market, opportunity, and niche
Basically, this sheet answers the question if there are enough people to make your business profitable. That is why your Pitch Deck must contain a slide that is all about your target market, the opportunities available, and the niche you’ve chosen.
Be specific. If you become too generic, investors will start to wonder whether you really have a strong vision. A very strong focus, on the other hand, tells them you have done your homework, which will build trust.
You probably have been talking for 5-10 minutes and they still don’t know what it is you want them to invest in. You’ve told them what your vision is, you’ve gotten the investors to understand there is a problem. They know who is struggling with the problem and that there is a potential for profit.
All you have done so far is build up tension. If you are any good at storytelling, they should be eager to know what you are going to do about it. When they are eager to find out, it’s the best time to tell them about your product.
How is your business going to generate revenue? No Pitch Deck is complete without a slide about the business model or revenue model. Who will be paying you, what’s your pricing? A common business model in SaaS is the subscription model.
Include a roadmap. Ideally, this roadmap starts in the past, depicting how you’ve gotten where you are now. Share milestones and proofs-of-concept (POC) which show your idea actually works. More importantly, your roadmap also maps out the future. What are the next milestones you aim to achieve? When will you get there?
Marketing and sales
Even the best product will fail if your clients don’t know your product exists. As a start-up, you cannot yet rely on word-of-mouth or positive reviews.
Marketing and sales are essential, so investors want to know you have a solid plan on how to get clients to notice your SaaS product.
Investors do not only want to know the “plan”, they also want to know the “(wo)man. They want to know their money is in the right (reliable) hands of people who know what they are doing.
If you are opening a pizza restaurant, you’d want a professional chef in the kitchen. If you are building a chain of car repair shops, a good mechanic would be a great asset. And if you are building a SaaS product to, say, increase the efficiency of communication between medical professionals, having someone who knows their way around a hospital would be very beneficial to your chances of success.
In business, some things never change. Sure, SaaS is relatively new, but you will still have to provide old school financials for the first years of operation:
- Sales forecast
- Projected P&L
- Cash flow forecast
These financial statements can be pretty bulky. And your investors will demand to read the entire spreadsheet. But in your Pitch Deck, just show the essentials. Tell your investors your expected sales figures, growth of your client base, and of course revenue, cost, and profits.
Expect questions! Be sure you know the assumptions underlying this sheet. Also, have a few other scenarios available to answer questions like “What if you have fewer sales in the first year”.
Remember, it is very easy to write down you expect sales to grow by 25% every year. But such promises are very hard to believe. So: be realistic.
Show that you’ve done some serious research. Compare your company with the competition. Don’t just compare yourself with people providing a similar service, but also include those who solve the same problem differently. Remember that pizza restaurant? The competition isn’t just other pizza restaurants. A pizza restaurant also competes with a Thai Restaurant, a Burger Restaurant, and with home delivery services.
Investment and spending plan
The Pitch Deck isn’t going to get you the money, but that doesn’t mean you shouldn’t talk about it. Present your investors with a clear investment plan which includes the things you need to make your business a success. After all, if you are asking them for money, wouldn’t it make sense to explain why you need it?
Tell them how much money your company needs in total, how much you’ve already raised from other investors and how much funding you still need.
Most investors don’t intend to stay part of your business forever. Many investors have a fixed time horizon. If you want them to enter, you need to give them the reassurance they will also be able to leave.
Include an exit plan in your Pitch Deck and show how and when your investors will see a return on their investment. Will your company go public through an IPO, or do you intend to be acquired by another (bigger) company? Or have you come up with another idea?
Take your time writing the Ultimate Pitch Deck
Writing a good Pitch Deck is not something you do in a single afternoon. It takes some serious thinking and reflection. The time invested in writing the ultimate Pitch Deck will pay off, though. After all, no company has ever failed due to a clear strategy and proper planning. Your Pitch Deck will not just help you seal the deal, thinking about it will help your company become more successful in everything it does!