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Pitching to Venture Capital Firms: Dos and Don'ts for a successful presentation

Fundraising is always hard for businesses, no matter what stage they are in. Recent research by DocSend found that the typical series seed raise takes over 12 weeks to conclude, during which time the founders communicate with 58 investors and have 40 investor meetings.

Successful business owners and established companies need a captivating pitch and supporting pitch deck.

There is a formula for the famed funding pitch deck, which may be a relief given the variety in presentation styles and visual preferences. In reality, there are a variety of presentations and discussions that venture capital investors have come to anticipate, and we'll go through them all here.


Venture Capital Firms and Funding Pitch Deck


It's important to have a good pitch deck, whether you're a startup founder, company owner, or "corporate entrepreneur," since it sums up why people should fund your venture.


However, there is no universally accepted strategy for preparing an investor presentation deck; every Venture Capital investor has their preferences.


Let’s understand how the funding pitch works in the following section.


What is Venture Capital?


Venture capital is finance investors supply to start-ups or established firms, unlike loans issued by banks that need complete security. Venture money invests in higher-risk businesses with long-term development potential. Although the possibility for loss is greater for venture capital, the reward may be substantial if the firm successfully expands and increases revenues.


US venture capital investment trends in 2023


Venture capital (VC) investment in the US has cooled down from the record-setting pace of 2021, but it remains a significant source of funding for startups.

In the first three quarters of 2023, VC-backed companies raised $98.1 billion, down 15% from the same period in 2022.

However, this is still the third-highest year for VC investment on record.

US venture capital investment trends

Banks, wealthy individuals, and specialized organizations typically invest in venture capital. A business seeking venture financing must pass stringent due diligence checks to see whether it is a good investment.


This method examines the organization from every angle, from its business model to its products and services to its management. A business seeking financing must present its business model to potential investors as part of this procedure.


When investors invest money in a company, they often play a significant role in the firm, whether it's via ownership stakes, advisory services, or connections.


What is a Funding Pitch Deck?


Businesses use pitch decks, often marketing decks, to persuade potential customers or investors to engage with them. They are brief explanations about your company designed to assist others in getting acquainted with it quickly.

A funding pitch deck is a set of slides that provides a high-level overview of your company, strategy, objectives, and vision.

Keep your proposal decks on par with all the required information to support winning the desired funding amount.


Prospective customers and investors may receive pitch decks in person or via email. One of the most remarkable ways to ensure a possible partner has looked through your slides is to present your pitch deck to them. You may also address any pressing concerns they may have at this time.


Why is it crucial to have a high-quality investor pitch?


Getting ready for expansion presents new difficulties for every business. In the early stages of their existence, most startups need help to meet their financial obligations.


The firm might take a while to emerge from the "valley of death" and start reaping enough profits to pay back investors sustainably. As a result, startups need to be proactive about seeking out other funding sources, and a well-crafted funding pitch deck may go a long way toward attracting investors. Here are a few reasons why a pitch deck is crucial for your funding.

  • A startup's pitch deck convinces investors to buy its product or service. It summarizes the company's strengths, aims, business strategy, and value offer.

  • Startups can attract clients, partners, and workers with a good pitch deck. The startup can attract new customers and partners by showcasing its unique value offer.

  • A pitch deck may boost the startup's media coverage. A strong pitch deck may help the firm get news coverage, screenings, and other marketing opportunities.

  • A pitch deck validates companies and value propositions. The firm can get feedback and alter its strategy by showing consumers and partners the deck.

  • A pitch deck may aid internal communication. A pitch deck helps a firm define its objectives and guarantee everyone shares its vision.

Essentials for the Funding Pitch Deck


Below, we cover the subjects investors would anticipate and search for in funding pitches. However, as long as the story is logical, the sequence of topics is flexible.


Overview of the Company


If you want to give investors an indication of what to expect from the rest of the deck, use the Company Overview presentation as your opener. It should cover a few things, such as the issue your product addresses, background information on the management group, and any significant market traction your business has achieved.

The Team


In startups, especially in their formative stages, investors typically place a premium on a company's most valuable asset: its people. Whether they have faith in your reliability, competence, and perseverance is the deciding factor for investors.


When presenting a funding pitch to investors, it's crucial to emphasize the breadth and depth of your founding team's skill sets and expertise since these factors influence investment choices.


Current Progress or Traction


Including gripping traction, numbers will be well welcomed and will help develop confidence among investors regardless of the stage your business is in. Typical measures of "traction" include sales, website visitors, app downloads, and other indicators of expansion and popularity.


You may also have strategic alliances, new major accounts or clients, glowing reviews from satisfied customers, and awards obtained on this slide.


The Solution: Your Service or Product


After presenting the "Problem" slide, the next slide should provide the apparent answer: your company's product or service. Whether on the same presentation or a different show, you should also describe the nature of your company's product or service and how it stands out from the competition.


It's far more effective to demonstrate the usefulness of your product rather than just talk about it.


Revenue or Business Model


Discussing your company's pricing strategy, typical account size, sales and distribution strategy, and other similar topics will help reassure potential investors.


Include not just the existing revenue model but also any plans for it to show that you are not just making empty promises. For added decisiveness, you may even give dates.


Financials

Slidebean reports that only around 60% of winning funding pitch decks have a financial slide.

Investors will be interested to know the company's burn rate or the pace at which it consumes its funding before it begins generating positive cash flow through operations. As a result, you'll be able to provide a more concise overview of the presentation.


Do’s of Funding Pitches


You should not do a few essential things while presenting to venture investors. Before pitching your idea to a venture capital company or an individual investor, make sure you know all there is to know about them. Let’s have a look at the essentials here.


Use a Narrative


A topic might be relevant and more straightforward if explained through a tale. Investors are more likely to be interested in learning about a solution if they can see themselves in the customer's position via a well-crafted pitch deck.


The pitch deck of Tinder used this strategy in its presentation. Instead of just telling people how to use the app, Tinder showed them a sequence of pictures that walked them through each step. The app received over $50 million as funding in three rounds.


Keep things simple


Keep your presentation easy to understand, brief, and direct. Never volunteer more information than is strictly required. You might easily overwhelm and confuse your listeners.


Airbnb's legendary funding pitch deck secured over $112 million in funding. The information presented in each presentation was brief and to the point. They additionally eliminate the problems of relying solely on text by adding similar pictures and maps showing their issues.


Think on a grand scale.


Many first-time business owners must focus on the practical considerations of securing venture funding before limiting their vision for the company's future success.


TouristEye's legendary pitch deck used screenshots and travel-themed photos to illustrate how the app will bring a more individualized vacation planning approach. It's no surprise that Lonely Planet bought TouristEye, which was an impressive competitor.


Boast about your squad


Investors consider not just the concept but also the team behind it. Feature your team members' diverse educational and professional backgrounds and emphasize their talents.


If you make statements, support them with evidence


You must support all of your claims with hard evidence. You may establish the product's worth by including customer reviews, data from surveys and studies, and other statistics.


Even further, LinkedIn illustrates the connections between the currently dominant channels for a service and their predecessors. They show their expertise and win over their target audience by demonstrating that online platforms are now the primary access point for offline services.


Don'ts of Funding Pitches


You've probably heard this before around 90% of startups fail. If you cannot get the capital required to take your company to the next level, you risk becoming one of the other 90%. With the global economy becoming more unstable, your pitch deck is more important than ever. The following are the five most common blunders made while creating a funding pitch deck.


Not expecting questions or feedback


Only sometimes, a potential investor would listen to your funding pitch deck in its entirety without asking questions or providing criticism. You will not impress a prospective investor with your knowledge and preparation if you can't answer even the most basic queries about your pitch deck.


Solution: In this respect, actual practice is essential. You should go through your presentation slideshow in front of an audience (consisting of friends, family, coworkers, and peers) and ask for comments. Remember that a potential investor will be impressed by your quick thinking and will not tolerate a drawn-out response.


Giving unrealistic forecasts


For an investor, nothing is more discouraging than hearing millions of dollars in numbers that have no basis in reality. Extensive preparation is also likely to bear fruit down the road.


Solution: Consider anything that could impact your stats down the road. To provide more realistic estimates to the investor, you could account for the recognized risks and expected competitors in the market.


Using Too much Text


People may scan your proposal if you fill your presentation with long blocks of text. Providing too many details can easily sidetrack investors. Not that specifics don't have their place, but brevity and clarity are preferred when time is of the essence.


Solution: Excessive jargon and technicalities will likely turn off potential investors. Make sure the deck is clean and easy to scan. An investor's initial impression of you will rely on your pitch deck. Provide a manageable amount of detail; strike a balance.


Acknowledging Paid/Gully Awards


Award mentions are common in funding pitch decks. But the reality is that these prizes may be purchased or sponsored with little effort. Remember that they handle individual portfolios and get dozens of monthly decks when pitching to investors.


Solution: Mentioning a paid prize might hurt your credibility. Remove them from the deck as soon as you find them. Still, it's essential to highlight the prestigious honors that come about as a consequence of healthy competition.


Having no follow-up plan


When pitching a business, one of the most important things you can do is follow up with the investor following your presentation. Potential backers may have additional questions or want more information about certain aspects of your company proposal.


Solution: Contact them after the presentation to see if they have any questions or need anything clarified. It will show them that you're dedicated to the continued development of your firm and that you mean business.


Suit up for your funding with the perfect pitch desk


Funding pitches are a crucial part of every startup's development process. The only specific recipe for success is diligent study and planning. A startup may grow into a multibillion-dollar firm with the right pitch deck. Presenting a firm value to investors is just as crucial as giving a pitch deck.


For investment as well as stock option objectives, use top-end 409a valuation tools to generate a report that delivers unbiased valuations. A company's value provides concrete evidence of how much stock investors can expect in exchange for their capital. Make sure your pitch deck is as strong as possible.


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