Over the last years, we have seen hundreds of pitch decks from entrepreneurs and founders that were looking for an investment.
Because of this, we were able to gain a lot of experience in reviewing pitch decks, and now we want to share our knowledge with you!
With this list of top pitch deck mistakes and useful tips on how to fix them, we want to give you our advice on how you can avoid making the same mistakes that many entrepreneurs have done before.
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MISTAKE 1
Entrepreneurs fail to tell a story with their pitch deck
The first mistake is seemingly the simplest to say, and the hardest to do. Many Entrepreneurs fail to tell a story with their pitch deck.
The problem is that they are thinking: "Oh, I need a Team slide, and a problem slide, and a traction slide, and a vision slide, and solution slide."
What is going over their head is that creating a pitch deck is not a static process. It is not about implementing the slides that you have to include; it is more about the story you are telling.
The pitch decks we have seen doing this seem to have no character. These are the ones that will quickly be forgotten by an investor.
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SOLUTION
Use Powerful Storytelling to Create a Unique Pitch Deck
A great pitch deck story is made up of the same elements as a good book, which are action, excitement, success, and failure. We recommend you to include as many of these elements as you can.
Implementing these will drag the audience on your side. By the end of your pitch, investors should have made an emotional connection to you and your story.
If you want to use storytelling in your pitch deck, you should have a look at this:
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For the story to work, you can break the whole pitch deck into these four pieces.
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‍1. Create a relatable character
‍First, you have to create a relatable character. The purpose of this step is to get potential investors emotionally attached to your pitch.
Over the last couple of years, we made the experienced that investors are more likely to be interested in your pitch if you build a story with yourself being the protagonist. This also means that you should have an interesting past with and a certain level of "qualification" to solve the problem you encountered.
If you don't have that background, you can create a hypothetical character.
In this case you have to make sure that the story is closely connected with the problem you encounterd.
As an example, you can create a hypothetical future customer of your product. He encounters the same problem as you did and suddenly finds out about the solution/product you created and from now on has a way better life by using your product.
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‍2. The character encounters a relatable problem
‍The next step of your story is about the problem your character has encountered. Tell the story of how the characters life looks like without your product. Describe precisely why the problem needs to be solved now.
Tip: This can be a very specific problem; not everybody knows about it. In case of this, you have to select the investors you want to contact carefully.
Investors often are professionals in a certain company branch but do not know anything about other branches.
Make sure that you only contact investors that are familiar with your field of work. They are most likely to understand the problem you are going to present.
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‍3. Present the solution nobody has ever thought of
‍Next, tell the story of how the characters life looks if he uses your product.
Describe what he emotionally feels by using it. Go into every detail. This will emotionally drag your investors deeper into your story. Explain why it works. At this point, you should support your presentation of the solution with statistics and facts.
If you already have real-life customers, you should definitely ask them for feedback and implement this in your pitch. Investors love feedback from real customers!
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4. You have found your life-goal
‍Remember this: Investors invest in teams, not only in products.
Sure, the product has to be attractive to investors, and the profit they can make by investing in it should be high. But, and this is very important, many investors lay way more focus on how the team works than on how the product works. They have to trust in you, they have to trust in your work, and they have to trust in your ability to run a company. Make sure to show them that you are ready to go big!
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MISTAKE 2
Entrepreneurs fail to think like an investor
The second thing entrepreneurs tend to do wrong is that they don't think at an investor's level.
Entrepreneurs are execution machines. Every day every week, they need to figure out how to build products, how to sell this product, and how to hire employees.
Most entrepreneurs are actually very good at stepping up one level and thinking about their company vision. However, most entrepreneurs are not great at thinking about how the world is changing at the macro level - but investors are.
Investors are not building companies every day. Instead, they spend their time meeting a lot of different people. They're thinking about how the world is changing and where that creates opportunities. For this reason, they try to find companies that satisfy those opportunities.
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SOLUTION
Teach investors something new
The best entrepreneurs are able to teach investors something new, and the best way to do so is to give them the reason "Why Now" is the best time to build the company you want to build.
Here you can see the "Why Now"-slide from our pitch deck template.
We always recommend investing a lot of time thinking about what content you should put on this slide.
The information should be interesting and compelling, new and informative, data-driven and comprehensible.
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Investors have a sixth sense: they know when you are trying so sell wrong information about why now is the best time for an investment.
This is very important to know. In the past, we have seen this several times before so it is worth to mention: never ever try to give false information about "Why Now" is the best time to invest in your company. As said before, investors talk to a lot of different people and quickly get a feeling of who is talking nonsense and who is not.
For Example, you are trying to impress potential investors with how big your target market could be in the future. Make sure your numbers are backed up by data from a legit source.
Investors love numbers and know everything about them, so expect to be asked about these numbers you provided. If they are too far fetched, investors will lose confidence in you.
Here is how you can teach investors instead
• Provide information about why your product will be successful.
• Have a strong belief in how society and people's behavior will change and why this is an opportunity for your company.
• Show how user-behavior will change and how you will adopt to it.
• Give insight in how the technological landscape will change and why your company is able to keep up with it.
Good to know about investors
What they are also looking for:
‍High returns
‍Depending on your level of funding, investors are attracted by opportunities that payback at least four to six times their investment.‍
Payback Time
‍Investors expect returns after three to five years. This also means that at that point in time, the investor will sell his shares to another investor or, depending on his shares, sell the whole company. Make sure to think about this carefully and decide if you are o.k. with it.‍
The Team
‍Yes, we know. We have said this many times and will say it many more times. Investors invest in Ideas AND the teams behind them. They will spend a lot of time with you building the company, and if you do not get along with each other- or do not trust each other, things will probably not work out.‍
Company valuation
‍Most investors only have a limited amount of money to invest in each company. As a consequence, they (not every investor, but many) try to reach a low valuation of your company. Why? Because they will get more shares for their money! However, when the time has come, and an investor wants to sell his shares, he will be interested in a very high valuation of your company. Why? Because he will get more money for his shares!
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MISTAKE 3
Entrepreneurs underestimate the importance of the "market opportunity" slide
As we have already mentioned in the last paragraph, investors want to invest in companies that might deliver a massive return on investment. Your task is to convince investors that your target market is large enough to deliver that ROI.
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SOLUTION
Make use of data-visualization to show the scale of your market quickly
The best way to present the scale of your market is by using visualized data.
During a pitch, you want your potential investors to understand your business and market within seconds. Visualized data will help you achieve this goal. Why? Just by looking at two things and comparing them in its size, we can easily decide: A is greater than B. We do it dozens of times every day. With the infographics on your market slide, you can quickly turn a "Nah; this is not an investment case for me" to an "okay, this is getting interesting. The market is huge!"
If you have not done any research up to this point, we have some useful advice for you!
How you can analyze the size of your market
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Research is the not only the fundament of your market opportunity slide, but also the fundament of your product!
At this stage of your journey as an entrepreneur, you should be familiar with the size of your market. If you haven't researched the size of your target market yet, here are some useful tips on how to determine how large it is.
- Who are your customers, and how many of these people live?
- How many of your customers experience the same problem you initially encountered?
- Analyze your competitors and how many customers they might have. You can get a sense of this by checking their website visitors. Search for their URL with similarweb.com!
- Is your product a low priced product? How many customers do you need to build a huge business?
- What else do your potential customers buy? Do they spend a lot of money for a similar product?
MISTAKE 4
Entrepreneurs fail to show the traction they have already obtained
Entrepreneurs tend to lay the focus of their pitch deck on how great their idea or team is. Sure, these are essentials determinants for investors whether they are going to invest in your company or not. That's great, but for investors, traction is at least on the same level of their interest, and a lot of entrepreneurs fail to show how much traction they have already achieved.
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SOLUTION
Collect data from everywhere you can, even if you think it is not worth to mention: mention it
Useful list of sources you can gather data from to show your traction
‍Sales
‍If you have any sales: great! Even it is a small number; someone was already interested enough to buy your product.
Avg. time user spent on your website
‍If they spent more than 10 seconds on your website, then it is worth to mention. Most people leave within the first 10 seconds and never come back!
‍Collected email addresses
Do you have a list of potential customers? Great, this shows that people want to know more about your product and are willing to buy at some point.
‍Customer feedback & testimonials
‍Look out for customer feedback or testimonials. Investors love to see if people have an opinion on your product/idea.
‍Number of users on your homepage
‍There are many website related metrics you can use to show how much traction you already achieved. Avg. Time spent, and the number of users who have already been on your website are the two most important.
‍Backlinks to your website
‍A backlink is worth a lot. Have you ever tried to convince someone to link back to your homepage? It is almost impossible if your website or product is not remarkable. So if you have backlinks, mention them!
‍Strategic partnerships
‍Having strategic partnerships signals investors that you have valuable assets other companies want/need, which leads to traction.
‍PR and Press
‍Whenever a blog, website, Instagram profile, Facebook profile, Twitter profile, or LinkedIn profile [...] has mentioned your company, you should refer to it in your pitch deck!
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