What’s The Best VC Pitchdeck?
Don’t live your life impressing others. Live your life impressing yourself.
The above is an interesting quote that relates to many aspects of life and business, especially when pitching your startup to the venture capitalists.
The best pitch deck comes from the heart; it’s not one created for the benefit of venture capitalists. It is for yourself, an outgrowth of the startup business you’re raising.
When you prepare your company’s business model for the VC pitchdeck, pay attention to the details:
- Make it eye catching
- Demonstrate your passion for your business
- Make it compelling
- Make it concise and to the point
- Demonstrate the urgency of getting this deal done. Show the VC why it benefits him (not you) and if he doesn’t go with the deal, make sure he understands someone else will.
Your VC pitch deck needs to be a great snapshot of your business.
What You Need To Know
As an entrepreneur seeking investment, you will be asked to present a detailed financial model.
A financial model that demonstrates and explains all of the possible assumptions behind the numbers.
This financial model is the key to your getting the funding you need. It is a tool you use to show your real perspective to investors. Your financial model needs to be more compelling than the average run of the mill catalog financial model.
How to Prepare Your Financial Model
Think of answering these core elements when preparing for a funding round:
- Assumptions that a VC could make.
- P&L Marketing
- Balance Sheet
- Key Forecasts
Cover These Vital Elements in Your Presentation
You must do your homework and cover these areas as they relate to your particular heading.
- Your Market Size
- Projected Growth of the Market
- The Way in which Your Business Meets Your Client’s Unmet Needs
- The Value Your Business Offers
- Market Competition
- Strengths and Weaknesses of Your Business
- Business Model
- Financial Model
- Historic Outline of Your Business
- Future Timeline
- Return Options
- Exit Strategy
- Your Team
Actions Speak Louder than Words
Keep in mind that VCs want to see your past, current and future actions. These are key elements that speak to them. They don’t want to hear the fluff. Show them a detailed financial model that tests their assumptions. Show them how your startup is going to make them money.
What Are the Assumptions a VC May Have?
A VC will always make assumptions. That’s the way he forecasts the possibilities for investing in the business. Use historical data to base your future growth assessments on reality. Use metrics that demonstrate the number of users for your service or product, the amount of money you generate for each user, new types of revenue and other data that pertains to your business.
Short Term and Long Term Cash Strategies
A VC wants to know about your cash administration. He wants to know how you are going to manage your finances and the potential funding raised. Effective cash flow strategies ensure you keep enough cash on hand to meet the business financial obligations. These include payroll, suppliers, customers, loans, inventory and expenditures.
What Happens Afterwards?
When and if you do get VC funding your business and financial models don’t sit idly by. You and your management team need to work and improve these models constantly. They serve as a guide for your business as it develops. Your performance will be judged according to your initial forecasts.