How to Create a Better Pitch Deck for VCs

1. The Ultimate Startup Pitch Deck from a VC perspective | Eliott Harfouche

2. The Funding options Venture Capital is one option. There are numerous other sources so make sure you evaluate the pros and cons of each source Family & Friends Debit & Credit card/lines Grants Your customers CrowdfundingVenture Capital

3. The seed is the setup round (s) where a startup venture approaches an angel or a VC firm for funding their product/ MVP or Idea The Seed Stage Series A, B, C+ $2.5M - $10M+ Institutional Seed $500K - $1.5M+ Accelerator $20K-$150K Angel $25K-$250K In scope Out scope

4. SET ROUND SIZE 1 2 1 3 Runway : Raise enough capital to give yourself 18 months. Keep in mind it will likely take 3-6 months to raise a Series A Dilution : Every time you raise a round, try to sell no more than 10-25 % of the company Target : Set a modest raise amount. It’s always better to nail your target, say you’re “oversubscribed” an then increase the size of round depending on investor interest and terms/dilution

5. “ The “best” Investor Pitch deck outline

6. Pitch Deck outline ◉ Cover slide ◉ Elevator pitch ◉ Market Problem & current solutions ◉ Your Solution ◉ Team (if really impressive, potentially move slide after “elevator pitch” slide” ◉ Board member & advisors ( optional, or combine w/team slide) ◉ Traction & Awards ◉ Market fit/ competition ◉ Competitive Advantages ◉ Revenue Model : Key revenue streams & Business Model ◉ Expense model : Key expenses, time Efforts & strategy ◉ Financial projections ◉ Exit strategy (optional) ◉ The Ask : Capital raise & use of funds ◉ Closing slide : Questions ? Contact details

7. Potential Appendix slides ◉ VC Favorite slide : Life-time Values of Customer (LTV) vs. Cost to acquire Customer (CAC) ◉ Timeline : History, milestones & prior Investment rounds ( if any ) ◉ Detailed value proposition to clients / users/ partners ◉ Additional screen shots from demo ◉ Average revenue per user or customer ( ARPU) ◉ Pipeline of potential clients, % likelihood of closing, revenue potential from pipeline ◉ Churn rate by cohort analysis ◉ Detailed financial breakdown ◉ Breakeven analysis : # client/ $ revenue ◉ Partnership agreements / structures ◉ List of competitors capital raises & Investors ◉ Capital structure : Ownership of founders & current investors ◉ Cash runway ( # of months @ burn rate $)

8. Slide One Cover Slide

9. Logo / Name of Compay Cover Slide Purpose of presentation Investor Presentation Date: Optional Make sure if you put one, the date should always be updated Other potential Additions Logos of accelerator, awards, publications featuring company, slogan

10. Elevator Pitch slide Service/ product What is the service or product? Problem Wat’s the core problem (describe pain) or need that you’re solving? Vision What’s your big vision? Create a brief one liner that describes :

11. Market Problem/ Current Solutions What’s the problem or unmet need you’re solving? ◉ Clearly show the pain of the problem or convey the strong need that is currently unfulfilled. Don’t just say it! ◉ You can’t create demand (usually only market leaders can) Current Solutions= Current Problems Biggest competition – status quo, changing customers behavior, even if old systems are inferior, they exist everywhere, you don’t Solve your client’s number- one problem Not their 4th or 6th problem

12. Market opportunity Total Addressable Market What’s your real target market size? The sub=sector of the general market? Size it: name it in units/ and or revenue with growth rate Target Client & key characteristics Enterprises vs Consumers, demographic target vs type of business( small vs large) example of your ideal clients Current demands & unique needs Describe any important market evolutions and why we’re now at an inflection point

13. Logo / Name of Company Traction / Performance / Awards Purpose of presentation Investor Presentation Date: Optional Make sure if you put one, the date is updated Other potential Additions Logos of accelerator, awards, publications featuring company, slogan

14. Core Team The founders and co-founders Team Relevant Experiences Successes ( Exits) Failures ( Good war stories) Education Leadership Experience At least one of the core team should demonstrate a previous leadership experience Do’s & Don’t ◉ Do Put photos of the team ◉ Don’t write sentences ◉ Do 1-3 Bullet per person, or 1 key bullet per person

15. Market Fit/ Competition ◉Show how you fit into the Market Landscape ◉Direct Competitors Vs . Indirect Competitors • How much capital raised? Which investors ? Revenues? Key stats ? • Why won’t indirect become direct if they see what you’re doing works ? ◉Your Biggest competitor is the STATUS QUO ! Why will customers switch to you ? ◉Are you changing customer behavior ? ◉Types of diagram/ Charts : • Market Landscape : X/ Y axis charts or Venn Diagrams ( easy to understand ) • Feature list comparison ( often weaker looking, more confusing, takes

16. Market Landscape ( Example 1 ) Quality Economical Your Logo Co. C Co. D Co. A Co. B Quality HighLow Expensive Discounted Economical Your Logo Co. A Co. B Co. C Co. D Put your company’s logo on the right corner

17. Industry Segment3 Industry Segment2 YourLogo Indirect Competitor Logos Indirect Competitor Logos Industry Segment1 Indirect Competitor Logos Indirect Competitor Logos Industry Segment4 Direct Competitor Logos Direct Competitor Logos Direct Logos Direct Competitor Competitor Competitor Logos Competitor Logos Market Landscape ( Example 2 )

18. Feature a Comparison List Company Feature 1 Feature 2 Feature 3 Feature 4 Feature 5 Feature 6 Feature 7 Total Your Company 7 Competi torA 4 Competi torB 4 Competi torC 3 Competi torD 2 Competi torE 2 Indirect Competitor A 2 Indirect Competitor B 3 Indirect Competitor C 3 Indirect Competitor D 3 Indirect Competitor E 3 This often makes you look 2x- 3x better, so maybe only have as an appendix slide

19. Current Competitive advantages Are they relative ? Absolute ? How sustainable are they ? Competitor’s competitive advantages / weaknesses ? Competitive Advantage Patents List all your pending/acquired patents with the reason behind them Key relationship/ Partnership State any relationship that is strategic to your business : client, supplier, horizontal partner… Barriers to Entry Money, time, expertise, relationships, patents..

20. Revenue Model ◉State the Key revenue streams. How you make money ◉Pricing : Is if flat fee or % ? Why that rate ◉Recurring Revenue frequency ◉If there’s a big difference between gross vs net revenue, state why ! ◉High volume vs low volume business ◉Expected conversion rate ◉Expected ARPU ( Average revenue per user ) ? ◉Life time Value of Customers ( LTV ) ? ◉Extras : apply multiples if possible, show basic math with examples

21. VC Favorite Show your LTV / CAC multiple ( higher the better) and explain how you plan to increase LTV and decrease CAC overtime.

22. Number of Years projected ◉ Early-mid stage: 1-2 years historical, 3-5 year projections ◉ Seed stage : show 6-year projections Financial Projections Target Market size vs acquired clients ◉ Show total # potential clients in target market per year. Show growing market size ◉ # of free users vs # of Revenue generating users ◉ Show total # clients per year and % market penetration VC hack : show sanity in growth & penetration over the years. Be conservative rather than aggressive ! High Level financials ◉ Main line items : Revenue, COGS, gross profit, OPEX, EBITDA ◉ Optional : Break out key revenue streams, Gross vs Net. Revenue

23. Financial Projections ( Example ) Year 1(Actual) Year 2(Est) Year 3(Est) Year 4(Est) Year 5(Est) Target Market 14,000,000 14,140,000 14,281,400 14,424,000 14,568,456 Total Users 47,542 180,000 450,000 850,000 1,300,000 Paying Customers, AfterChurn 3,450 15,500 37,000 64000 125,000 % MarketPenetration 0.02% 0.11% 0.26% 0.44% 0.86% Gross Revenue $ 800,000 $ 4,000,000 $ 12,000,000 $ 25,000,000 $ 50,000,000 Net Revenue $ 720,000 $ 3,400,000 $ 10,200,000 $ 21,250,000 $ 42,500,000 % Net Revenue 90% 85% 85% 85% 85% COGS $ 1,070,000 $ 2,900,000 $ 7,700,000 $ 13,750,000 $ 25,500,000 Gross Profit $ (350,000) $ 500,000 $ 2,500,000 $ 7,500,000 $ 17,000,000 Gross Margin -49% 15% 25% 35% 40% Operating Expenses $ 1,500,000 $3,000,000 $ 4,000,000 $ 6,000,000 $ 10,000,000 EBITDA $ (1,850,000) $(2,500,000) $ (1,500,000) $ 1,500,000 $ 7,000,000 EBITDA Margin -257% -74% -15% 7% 16%

24. Potential Appendix slides ◉ Acquisition: Most likely exit option for companies • Name potential companies (any unique relationships with them?) • Name types / categories of companies that could acquire you • Why would they acquire you, how do you fit into their strategy? • Why won’t they try to build it themselves? ◉ Trade sale/ Financial Buyer : Will the company generate excess cash flow that could make it attractive to financial buyers to generate a return? Often buys for lower multiples ( not as high exits) ◉ IPO : The least likely exit for a company, but a possibility. Note that almost 80% of VC exits are via acquisition, and only 20% IPO

25. Capital Raise & Uses of Funds ◉ The ask : How much Capital are you looking for? ◉Capital Raise • Stage/ Size (eg. : Seed round: 500K CHF, Series A : 2M-3M CHF • Investment terms • Preferred Equity ( convertible into common) @ XCHF Pre-money valuation • Convertible note @ XCHF Valuation Cap, Y% discount into next round, Z% interest rate • Investors in round: Previous investors? New investors? Founders? Strategic angels ? • How long will new round last ? ( runway) • Prior Investment rounds : Size? Investors? Valuation? Key terms ? ◉ Use of Funds • Sales & Marketing( commercial) , hire high profile( key) employees, Founders salaries( should never be very high- it’s a deal breaker) • File patents, further develop technology st

26. Closing slide The logo (Big & in the middle) link to website Any questions ? Contact info : Name / email/ phone

27. Words of Wisdom There are no right number of slides However, if you plan to have many slide, its better to do short vs long version Be 10x Better better Because as the Founder of PayPal said once: being 2-3x better isn’t good enough Focus on your #1 Customer Again and again, don’t focus on the 10th problem, it means there no critical need for that There are lots of great ideas But only few can execute them Biggest competition to raising Companies with equally great ( or better ideas, but more traction) which one would you pick? Best Opportunity A big growing market, with a big problem, and an elegant solution, where you can achieve LTV > CAC

28. About me ◉ My career path has taken me toward the Venture space with domain expertise in emerging technology start-ups. My focus at Polytech Ventures is on assisting portfolio companies in Strategy related decisions generating growth and scale. ◉ Most often I dedicate my time focusing on helping founders & great entrepreneurs achieve their full potential and build the next-gen product and services that will help our societies shift to new business models with today's disruptive technologies. ◉ Prior to joining Polytech Ventures, I was the growth strategist and Head of BD at PIP Financials in London. I oversaw the growth of the company into new markets and was leader in the DACH region. Before I have been part of creating and implementing ground-breaking growth solutions optimizing costs and improving efficiency for key clients in the Telecom, Pharma, and Clouding for the Global Fortune 500 companies as a strategy consultant at Roland Berger in the GCC. ◉ I have graduated from both Saint-Gallen University and HEC Lausanne, where I earned my Master’s degree in Management, emphasizing on Strategy and Entrepreneurship. ◉ Before that, I graduated in 2012 from University of Saint-Joseph in Beirut, Lebanon with a Bachelor in Economics. I am fluent in English, French, and Arabic, while having limited speaking of German. --------------------------------------------------- ◉ I am particularly interested in investing in and partnering with first time tech founders, who have a strong perspective about solving big problems their way.

29. Thanks! If you liked this pres. You can follow me on Linkedin, Twitter and Medium. I usually write about Venture Capital, SaaS, Marketplace, metrics, monetization, and growth. If you have any comment @eliottxharf https://www.linkedin.com/in/eliottharfouche/ @summitgva

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