“You talkin’ to me?” – Travis Bickle (Robert DeNiro ) – Taxi Driver, the movie
So, what is the real purpose of preparing a pitch deck? Like everyone else, I have a format I like to follow. In fact, you can find it on our website – we call it the Perfect Pitch (get it, sports fans?) It includes everything from a suggested order of slides to hints on what to say before and after your pitch and even some helpful hints on shading and color schemes. But, is that really what this is all about? Will the concepts and opportunity you craft into 21 slides really land you an investment?
Well, I for one think it is a required exercise, but perhaps not for the reasons you think. To me, this process is nothing but a test – a challenge to see how you and your team think collectively. Business is tough; the only thing certain is change and investors want to get a feel for how you and your team think. So, let’s drill down on this a bit and peel back the onion on a few critical components of a pitch.
Competition –a basic concept; how do you measure up against others? Think about it. If you don’t know a “player” in your space, what does that tell an investor about the depth of your market knowledge? And, suppose the investor brings up a new unknown competitor. Isn’t the way you react to that news tell the investor something about how successfully you might face such a challenge tomorrow?
Financials – everybody wants to measure the opportunity. But, do you think most investors focus in on the details of your projections or is it more important to show them how you conceptualize revenue streams and cost structure? I just reviewed a plan where revenue from year 2 to year 3 grew by $20 million and costs by $200,000. Nice work if you can get it – but, I am pretty sure that logic (or lack of it) will not get you a passing grade.
Competitive Advantage – what makes your product unique – what real pain does it alleviate and what prevents a newcomer from knocking you off? Everyone suspects this can and will happen but how do you present your thought process for dealing with this; for keeping ahead of others?
So, at the end of the day, an investor wants to know that you are “talkin’ to them.” But, it is not just words – it is conversation. They want to get a feel for what makes you tick and how you will address the unknown. This is not a multiple choice test; it is an essay. So, concentrate on the message and what you want to say; emphasize the “brain power” of your team and I am sure you will pass the test with flying colors.