How to Build a Startup Pitch Deck That Hooks Investors (Part Two)
Pitch decks are the lifeblood of startups seeking funding. But crafting a startup pitch deck that actually engages and persuades investors is no easy feat. So how do you create a winning startup pitch deck that secures crucial seed funding for your promising venture?
Legendary VC firm Sequoia Capital analyzed over 1,000 startup pitch decks and found the most effective presentations contained around 10 slides. But what exactly should each of those critical 10 slides include?
In part two of our series on building a pitch deck that hooks investors, Lidia Vijga, co-founder and CEO at DeckLinks, breaks down the must-have sections with some helpful tips.
The problem slide.
The problem slide is arguably the most critical part of any startup pitch. Mess it up, and you’ve lost investors before even presenting your solution.
Startup pitch deck has to focus on one problem
The biggest mistake I see is founders trying to cram every problem their startup solves onto one slide. Their thinking is more is better. In reality, it has the opposite effect. Piling on multiple problems dilutes the slide’s impact and confuses investors. Instead, zero in on the core problem your startup aims to solve.
Use concise but vivid language to describe the problem. “Expense reports are a soul-crushing timesuck” packs more punch than generic statements like “expense reports are difficult”.
Back up your claims with eye-opening data points. For example, “One of our clients used to spend $42,000/year filing expense reports.” Numbers make the problem tangible.
Visuals are also key. Use images that evoke the emotions users feel when experiencing the problem. A stressed face buried in receipts conveys the pain point.
Treat this slide with incredible care. Nail the problem framing, and your solution will resonate so much stronger.
The solution slide.
After framing the problem, the next critical pitch deck slide covers your startup’s solution. This slide needs to convince investors that your solution can scale along with massive customer demand.
Emphasize that your solution is scalable
Backing up your claims with data is crucial. For example, demo that your current software already handles API calls 10X faster than competitors. Or showcase skyrocketing customer signups as social proof of demand.
You can also quantify scale potential by conveying massive total addressable market size. For example, “Our solution democratizes a $400B industry.” Huge TAMs underscore serious scalability.
At the end of the day, investors need to know your startup can capture the enormous opportunity ahead.
Startup pitch deck has to include real-life stories
Statistics and data are crucial for quantifying key problems. But nothing hooks investors emotionally like a compelling real-life story.
Sharing a real-life example of a customer struggling with the problem you're solving makes it hit home on a human level. Investors suddenly think "I could see myself in that situation" and connect with the pain point.
When we pitched investors on our first startup, our problem slide featured a story about a frustrating procurement experience in the media industry. We described a media planner stuck in a maze of different media vendors.
This story instantly allowed investors to step into the shoes of that frustrated media planner. One even interjected "We had that exact experience recently with my company!"
Real-life stories work because they zoom in on how one person concretely experiences the broader problem. The details become memorable and evoke investor empathy. Investors no longer see it as merely a statistic on a slide but rather a frustration felt by real people like themselves.
Pitch deck should clearly show a gap in the market
Investors want proof your startup isn’t just trying to carbon copy an existing solution. I like to create a comparison table visually contrasting our product against competitors. This makes it easy to see that we solve pain points others overlook.
For example, startup founders always compare our product, DeckLinks, to DocSend. We are bootstrapping DeckLinks, however, if we were to raise funding, we'd show a comparison table highlighting our video capabilities and granular engagement analytics.
These capability gaps should highlight an unmet market need that your startup is uniquely positioned to fill. You can further prove gaps by using data to showcase competitors' shortcomings. For example, cite their high customer churn rates or low NPS scores.
It is crucial to avoid speaking negatively about other successful startups or competitors. It takes hard work and a lot of time to build and scale a company. Also, steer clear of designing a chart that solely highlights the shortcomings of your competitors while presenting your own startup as flawless with a perfect score of 10 out of 10. It is a red flag for investors.
Convincing investors your timing is right is crucial. That's why the most compelling decks include a “Why Now?” slide. This slide outlines all the emergent trends creating perfect conditions for your startup’s success in the current moment.
"Why Now" slide.
Convincing investors your timing is right is crucial. That's why the most compelling decks include a “Why Now?” slide. This slide outlines all the emergent trends creating perfect conditions for your startup’s success in the current moment.
For example, highlight how advances in smartphone cameras have finally enabled quality video calls rivaling face-to-face. Or how workplace preferences shifting post-pandemic have caused a spike in remote work software demand.
Changing demographics, social behaviors, industry regulations, and technologies can all be cited as “Why Now” catalysts. These macro shifts provide tailwinds that enhance the odds of your startup flourishing.
As someone who worked at and with some of the fastest growing startups in the US and Canada, I cannot overstate the importance of capitalizing on timing. Investors know that ideas requiring perfect timing have the highest payoff potential.
That’s why detailing all the factors that make this the perfect moment for your startup to seize the opportunity is so compelling.
In essence, the “Why Now” slide demonstrates this is a once-in-a-generation moment to solve the problem with your startup’s innovative solution. Seize it now or lose the advantage.
The market opportunity slide.
The market opportunity slide is where you quantify the size of the problem your startup solves. This convinces investors your solution taps into a lucrative, high-growth market.
Show your niche in the market
Start by identifying the specific vertical and niche your startup occupies. Don’t just say “e-commerce”. Specify you are targeting pet supplies within e-commerce. This level of focus is reassuring.
Next, quantify the broader market size that your startup operates by using a trusted data source. For example, cite a study showing “The global pet care market is $150 billion and growing 5% annually.”
Calling out massive numbers like $150 billion immediately conveys you are tackling a problem with billions in revenue potential. It quickly sizes up the total addressable market. You can further break down the market into strategic segments and quantify the opportunity within each. For example, highlight how rapidly the organic pet food market is expanding vs conventional pet food.
The key is positioning your startup within a thriving market destined for future growth and billions in consumer spending. Give sizing metrics that make investors perk up and take notice.
Clearly define your serviceable market
After conveying the total addressable market, experienced startup founders go deeper to break down market segments. This conveys you have an informed data-driven strategy for capturing a piece of the massive pie.
Specifically, you want to segment the total opportunity into serviceable and obtainable markets. The serviceable market represents who you can realistically serve. The obtainable market is the portion you can capture initially.
For example, let’s say the total market size for digital ads is $500 billion. Our serviceable market of small businesses is $120 billion. Of that segment e-commerce is $50 billion, we estimate obtaining $5 million by the end of next year based on our current traction.
Breaking down TAM into serviceable and obtainable chunks shows investors you have clarity on exactly which target customers to pursue first. This strategic focus inspires confidence in your growth plan.
Clearly state your TAM, SAM, and SOM
When presenting the market opportunity, show Total Addressable Market (TAM), Serviceable Addressable Market (SAM), and Serviceable Obtainable Market (SOM). These acronyms might sound intimidating but actually provide a simple framework for conveying your potential market size.
First, calculate your startup’s Total Addressable Market (TAM). As discussed earlier, this represents the total revenue opportunity from your entire target audience. This is the biggest number highlighting massive upside.
Next, determine your Serviceable Addressable Market (SAM). This narrows TAM down to the segment you can realistically market and sell to. For example, enterprise customers with 500+ employees.
Finally, estimate your Serviceable Obtainable Market (SOM). This is the portion of SAM you can immediately capture with your go-to-market motion. This is often a modest percentage of SAM, typically around 1%. Depending on the industry and your product, you can project higher SAM but you have to be realistic and not too pessimistic with your SOM projections.
Be sure to read our next and final part in this three-part blog series where Lidia breaks down the next five slides you should include in your startup pitch deck as well as how to add tracking insights.
About the Author
Lidia Vijga is a co-founder and CEO at DeckLinks. Lidia is a seasoned professional with nearly 10 years of first-hand experience in B2B sales and B2B marketing. She has a proven track record of driving growth for companies across various industries.Throughout her career, Lidia has led numerous successful sales campaigns and implemented innovative marketing strategies that have significantly increased revenue and reduced customer acquisition costs.