An impressive investor deck is essential for attracting and engaging investors and exciting them enough to want to know more about a company’s idea and ultimately to back it financially. Underpinning the deck should be a compelling story about the company and the idea. This narrative forms the structure of the deck, with every slide relating to it, adding more information that builds a compelling, cohesive, and credible proposition that investors will find irresistible. Return on investment is the key incentive for investors but a memorable story is essential for getting them interested.
Investment decks vary in content and length depending on the company’s stage of development and industry, but some slides are essential to a successful deck. We will look at these slides below.
Information presented simply and concisely is more likely to be remembered by busy, time-strapped investors. A slide stating the company name and logo is sufficient to embed them into investors’ minds and begin the brand recognition process.
Vision and value proposition
A succinct, one-sentence overview of the business, stating the value of the product or service to customers, can be very effective. It can be viewed as an ‘elevator pitch,’ a compelling statement of the company’s goal. Making a comparison with a well-known company with a similar business model can help investors get the right idea.
A definition of the problem that needs to be solved is crucial, as it is the point of the business. The focus should be on the nature and size of the problem, and who it affects. Making it realistic and relatable to investors will help them understand the problem and the motivation of the company to solve it.
Target market and opportunity
Investors will want to understand who ideal customers are, how they can be reached, the size of the market, and how the company will transform need into a business opportunity. Being able to provide data is useful, especially regarding market spend, the quantity of ideal customers, how many can be reached currently and in the future, and the cost of doing so. Such information will give investors an idea of scalability and help to quantify the opportunity. The data must be realistic and based on respected, verifiable sources and calculations: uncorroborated or generalised statements that inflate market size can be counterproductive.
This slide is the opportunity to describe the product or service, with the focus on how it solves customer problems and will do so better than alternatives in the market. It is also an opportunity to explain the journey from identifying the problem to conceiving the solution.
The crux of the proposition is showing investors how money will be made from this opportunity. Knowing the costs of producing the product, and how the selling price reflects its value, demonstrates the company understands its product. This slide should clarify the model for generating revenue, where the price fits in the current market, and whether it is a top-end, premium product or aims to undercut existing solutions with a budget price strategy.
If early adopters have already bought the product or service, it can serve to validate the efficacy of the solution, thereby reducing risk in investors’ minds. This slide is also an opportunity to demonstrate goals already achieved and next steps on the roadmap.
Marketing and sales strategy
Finding and winning customers can be a challenge for companies starting out. The marketing strategy shows investors how interest in the product or service, and sales, will be generated. This slide relates directly to the Target Market slide with a focus on plans for growing brand awareness, sales channels, and how ideal customers will be converted into buyers. It is useful to highlight how this strategy differs from competitors.
The executive team is a critical factor for investors backing a company. It is imperative they are persuaded the team is right for executing the vision. The focus should be on team members’ experience and previous successes, the skills and expertise they bring to the endeavour, the chemistry between members, the contributions they are making, and the shared attitude and belief they will make a success of the business. Any positions not yet filled should be identified with an explanation of why they are essential for meeting the company’s objectives.
Investors will expect to see a sales forecast, cash flow forecast, and income statement to understand the company’s current situation, what has been achieved so far, and future projections. These should be prepared with the right amount of detail, but not so much they are difficult to read and understand. Visually pleasing graphics are an effective way to get the information across. Underlying assumptions for sales goals, operational costs, customer acquisition costs, and profits should be realistic and justifiable as investors may want to interrogate them.
Being aware of competitors demonstrates an understanding of the market. There is always competition: if there is an identifiable need it is being solved somehow. Investors will want to understand how the company’s product or service is differentiated from alternatives and the competitive advantages that will make customers choose it. The focus should not be on denigrating competitors but on how the product provides a better solution.
How the investment will be used
This is the culmination of the presentation: where the company asks for the money, how much is needed, and what it will be used for. Investors will want to know how their money will help to realise the goals the company has set. This slide also sets out how investors will be involved in the company’s future, either partnership or equity investment, how long the financing will last, and the return on investment. If the company already has investors on board, explain why they chose to invest.
Investment decks should be short and succinct to maintain investors’ attention and interest, but sometimes additional slides can be useful. These can include a slide outlining the exit strategy, for instance growing the company for an IPO or acquisition by another company. Other slides might detail a strategic partnership or a product patent if these are in place.
Leaving investors with a positive impression and memory is essential. Giving them an executive summary, a brief overview of the company and product, together with a PDF of the investment deck, will help them remember the pitch. These can be shared with their partners and other stakeholders.
An investor deck contains highly confidential and sensitive information that must be kept secure. The company must ensure it is available only to viewers authorised by the company and cannot be copied, downloaded, or forwarded without permission. Many companies use a data room to securely store and share confidential information, and for tracking investor engagement with their investor deck, and for receiving valuable feedback. A Data Room can increase a company’s chances of raising funds.
Perivan is the market-leading provider of investor and shareholder communication services. Perivan’s Data Room, Engage, is used by many companies to manage their important corporate transactions, investor relations, and daily business. If you would like to know more about Perivan’s capabilities and see how Engage can help your fundraising objectives, please get in touch with our team to arrange a demo and answer your questions.