I was very fortunate to come across the pitch deck template that is shared in this blog post during the early days of my entrepreneurial journey. The template is from no other than Dave McClure and to be honest I am surprised that I have not seen it shared publicly in while.
To provide some background, McClure is a serial entrepreneur. He most famously was part of the early team at PayPal where he was the Director of Marketing from 2001 to 2004. After leaving his position at Paypal McClure founded Simply Hired where he was running their marketing programs.
McClure started making investments in startups after leaving PayPal as well where he established himself as one of the most prominent angel investors. Some of his early investments included Jambool (acquired by Google) or TechStreet (acquired by Amazon).
In September 2010 McClure founded the accelerator and Venture Capital firm 500 Startups with an initial class that included twelve startups. That number would later increase to 31 companies in October 2011.
As of today, 500 Startups portfolio of companies is comprised of over 1,200 companies with successful stories like Makerbot, Wildfire, Viki, or Simple. His firm has presence in Mountain View, San Francisco, London, Seoul, and Kuala Lumpur.
As you will be able to find the template is really good. However, a little texty and perhaps during some points outdated. I would encourage you to check my free pitch deck template below which has been used by over 7,000 entrepreneurs in the past 3 months.
With that being said, lets go ahead and take a look at the pitch deck template.
SLIDE 1 – THE COVER
Dave McClure is a marketing expert. He knows how to market things better than anyone. From this slide you will see how easy it is to understand where and how to connect with him in the event you are interested in learning further about the venture if you are an interested investor.
Most founders forget to include in their pitch deck their contact information. If you have a large following on social media you should include the links on the cover slide. I find this would provide social proof. Interested investors will most likely look you up and will also reach out to people in common in order to ask for references.
As I have also mentioned in the past, the cover slide is the place where you want to include some logos from media outlets that have featured you and perhaps some of the quotes from such articles. Other things you could include might be endorsements from celebrities and other influencers. That is definitely helpful and catchy for people reviewing your presentation.
SLIDE 2 – THE ELEVATOR PITCH
I am not sure why McClure would include the elevator pitch in this pitch deck template. In any case, I would say that as a second slide you could use along this line a vision or mission statement. This is a one liner that explains where you are heading. A mission statement can reflect short-term goals or long-term aspirations, but they should all share four key elements:
If I had to pick one vision and mission statement from one of the hottest companies at the moment I would probably go with Slack. These are the following:
We are on a mission to make your working life simpler, more pleasant, and more productive.“
Slack brings together all of your team‘s communications in one place, is instantly searchable, and is available wherever you go.
Normally I would use elevator pitches to open up the fundraising conversation and during casual meetings. Elevator pitches are a great way to get things rolling with investors and to get them engage to start asking you questions.
As I mention in my piece How To Sell Your Company in 30 Seconds the elevator pitch is one of the most important tools in order to get funding. The pitch should address three questions: Who are you? What you do? Where you want to go? Based on my experience and the hundreds of founders that I have met, the best elevator pitches have the following in common:
- They are 30 seconds long
- They spark interest and response
- They are clear
- They are authoritative
- They are about their customers and not themselves
- They highlight a problem and a solution
- They introduce their uniqueness
- They are relatable
- They have an awesome punchline at the end
SLIDE 3 – THE PROBLEM
The slide covering the problem should be a way for you to explain what gap you are filling in the market. This needs to be a painful problem that people can relate to and that investors would not have issues with understanding.
Furthermore, you are only resolving one problem. Not two or three. You need to come across as someone that is focused and relentless to resolve a known issue.
As I have covered in a previous post, Peter Thiel, cofounder of Paypal and one of the most respected investors in the Valley, created a pitch deck template that you might be able to find in the piece Silicon Valley Legend Creates Pitch Deck Template For Entrepreneurs. As you will be able to appreciate, Thiel does a phenomenal job at combining key information.
SLIDE 4 – YOUR SOLUTION
McClure never disappoints when it comes down to cracking jokes and giving you a good laugh. This slide demonstrates this point. What I like about this slide is that it keeps you engaged and it is also memorable.
Remember that startup investors review over 3,000 pitch decks per year and on average spend less than 3 minutes per presentation. You want to make sure that your slides are making an impact on the investor and that they will remember you.
With that being said, McClure is able to pull it off with a slide of this nature but I would encourage you to have some touch and to not go overboard with visuals or text that might not be suitable for investor distribution.
With that being said, the solution needs to be concise and very clear. Especially if you are a tech startup, your solution needs to be scalable. Scalability is the capability of a system to increase its total output under an increased load when resources are added. This is what investors essentially want to see. A company in which they can invest in order to have the wheel turn much faster.
Moreover, it makes sense on the solution to outline why it makes sense now. As you may know timing is everything in business and being at the right time in history is what really matters. Being too early or too late to market can be the main cause of failure for startups.
Avoid statements referencing you being the only one doing this, you being the clear leader, etc. Just like Mark Cuban puts it, there are at least 100 people that have come up with that idea before you and other companies that may be tackling that same problem with a different approach.
SLIDE 5 – THE MONEY SHOT
This slide refers to showing your product or service in action. If you are giving the presentation to investors in person, I would recommend showing your product live and letting investors play with it. This is something that the TV Show Shark Tank does very well with the companies that pitch.
In the event you are just including your product or service on the pitch deck for email distribution, I would then advise you to do just like McClure did which is to include some screen shots or videos of your product in action.
SLIDE 6 – THE MARKET SIZE
This slide is probably one of the most important slides that you are going to have in your pitch deck. The size of your market and the growth rate every year is what will determine the potential outcome of the investment from investors.
As a recommendation, I would do some market research and include some graphs like McClure did above with sources that you cite on the slide. These sources will add credibility.
Remember that any market that is under $1B might not be that attractive to an investor in hyper growth businesses. The reason for this is mainly because these investors are on the hunt for investment opportunities that may provide a 10x return in a horizon of 5 to 7 years.
As an example from this piece on TNW, if you are worth $5MM today post-financing, and the new investor owns 25 percent of the company ($1.25MM stake), they are going to need a financial plan that will get their stake up to $12.5MM (and the company valuation up to $50MM) within five years, without any dilution from subsequent financings. This could mean driving EBITDA up to $5 to $10MM within that period.
Ultimate investors, and especially institutional investors, look for companies that will not only transform or disrupt their industry but have the potential to fundamentally reshape the way consumers interact with a market.
SLIDE 7 – THE BUSINESS MODEL
As I describe on my post Study Reveals The Pitch Deck That Will Land You Millions, investors will dedicate more than 23% of the review time to your financials and revenue models slide. This is your most important slide in the presentation.
Here you are showing the investor what kind of traction you have been able to generate and also the type of projections that you expect a few years down the line. A clear summary with a few lines showing revenue streams would be ideal.
Financial projections are a shot in the dark when you are a startup. No one knows where you will be in 3 to 5 years from today. However, this slide serves as a roadmap and gives a good idea to the investor on where things are headed. It also shows how grounded you and your management team are. In the event you are not a financial guy, I would highly recommend that you have an expert taking a look at your financials before you send them out to investors.
A good example is the financials slide from Square‘s presentation which you will be able to find on the post 5 Startup Pitch Decks That Helped To Create Billion Dollar Companies. To be more precise you want to look at slide 8 of their presentation.
SLIDE 8 – THE PROPRIETARY TECHNOLOGY
Just like McClure states, investors want to see the unfair advantages that your venture has over other competitors that might be already operating within your space.
Some of the things you want to consider include what makes you unique? How will you be able to outperform your competitors? This could be done either by distribution channels, partnerships, or intellectual property. Make sure you include this information in your pitch deck in a very clear way.
Patents and IP should be included in this slide. In the event your company goes out of business, keeping in mind that 9 out of 10 startups fail, the IP will play a critical part in doing an exit and having your company be acquired by someone else which would return some of the initial investment back to investors.
SLIDE 9 – THE COMPETITION
Competition is healthy. There is nothing wrong with having a good amount of people that are competing directly or indirectly with what you are doing. It is not about the idea. It is all about the execution.
To give you some examples, Google was the 88th search engine to hit the market. For the most part followers have a better chance as they get to analyze the mistakes from the companies that entered the space first.
At the end of the day it is all about showing why you are better and faster than anyone else out there in the market. By listing all the competitors that you have you will come across to investors as someone that has done his/her homework.
SLIDE 10 – BETTER OR DIFFERENT
This slide is in my mind repetitive with everything that was already described in the previous slide. However, it clearly shows how you want to place your competitors on the slide via a diagram looking like image. You want to set yourself apart from everyone else and help the investor reviewing the slide understand very quickly what makes you different and unique.
In essence, a diagram slide helps in providing investors with the following:
- Snapshot of what you are doing and who the players are.
- Idea of how someone can hook you up with if they can’t help/invest
Perhaps another slide that you want to include is one that describes how much capital each competitor has already raised in the past and at what valuation. This could help in providing some perspective of how much the market is paying and what could be your valuation. This could also play in your favor when the time comes to negotiate the terms of the deal or proceeding with a potential investment.
Having some guidance on valuation, as described above, could help potential lead investors in knowing what kind of price tag they should place on your business or perhaps if you already have a lead, giving other investors the assurance of why the valuation of your company makes sense.
SLIDE 11 – THE MARKETING PLAN
You may have the most incredible product or service in the world, but if people don‘t know about it is completely meaningless. Obviously McClure being a very marketing driven person he focuses on how you spend your capital in marketing the product.
However, this slide should be instead called Use of Proceeds and instead include the marketing plan as a portion of what you intend to do with your company. Dedicating a slide of this nature might be repetitive to the competitive advantage slide where you already are touching on distribution and ways to acquire your customers.
On the use proceeds slide you want to include how you want to spend the capital that you are raising. These sections could be:
- Technology and infrastructure
SLIDE 12 – THE TEAM
While the financials and the business model might be the slide that investors spend the most amount of time on the team is critical. As Jim Collins states in his book Good To Great, a startup is a bus without a direction. If you have the right people seated on the right seats of the bus eventually you will be able find the right direction to get to the promised land.
On this specific slide, I would advise to only include the key members of your team which is in the form of leadership or management. List in bullets some of the accomplishments of that individual. The more relevant they are to the current business the better. These accomplishments could be previous founded startups, acquisitions, etc.
I would highly recommend you to use CoFoundersLab to find your founding team as well as your advisors. Over the last 2 years there have been over 170,000 introductions made on CoFoundersLab to build teams with this platform which I am proud to be part of. Note that over 62% of companies fail due to founder issues so who you choose matters!
SLIDE 13 – THE MONEY
I think this slide is a little bit weak. Use of Proceeds should be separate from the amount of capital that you are raising. In this slide I would include as well not a specific amount of capital but a range. So if you are raising $3M, put as a range that you are raising between $2M and $4M. That way you don‘t leave money on the table from VCs that may have investment limitations due to their mandates.
In addition, I would also suggest including some of the logos of existing investors. This will add social proof to your presentation and more credibility.
To conclude, to have a very successful pitch when you are showing the slides I would encourage you to take into account the following tips:
- Keep it simple and short
- Tell a story
- Don‘t put down competition
- Don‘t overstate the market oppotunity
- Send the deck as PDF or via Google Docs or Dropbox
Here’s the format: