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In the past, it was necessary for entrepreneurs looking to heighten finance to submit 100-folio business plans. Just modern-24-hour interval investors demand, at a minimum, a well-crafted fiscal model and a pitch deck.

Increasing volumes of applications for funding and more sophisticated investors take driven this tendency towards more succinct funding requests.

What does this mean for you? A new form of lure and allurement is being used by hopeful entrepreneurs to reel in funders. Enter the deck.

At its simplest, a deck is a screening tool that serves as the key to your first meeting with a potential investor. It is not a comprehensive analysis that is bound to put off busy investors with express fourth dimension on their easily. The purpose of the deck is to brand the job of investors easier — and to brand it impossible for them to say no.

Done properly, a great deck should explain why the problem yous are looking to solve creates a meaningful market place opportunity, why your solution will be able to solve this problem in a way that competitors and substitute solutions tin't, and why your team has created, or is able to create, a business model with matching unit economic science capable of turning any futurity marketplace share into tangible economic value.

Your deck should solicit sufficient interest from investors to yield follow-on meetings, conversations and discussions — opportunities for you to present your vision, and explain why investors are likely to profit from it.

DocSend, the sales enablement and analytics software provider, recently teamed upwards with Professor Tom Eisenmann from Harvard Business organisation School to conduct research into the use of pitches and the factors that contributed to their success.

Cadre takeaways were:

Continue your deck to 20 pages or less
Contact 20 to xxx investors
Highlight your team slide — it is one of the three most viewed and important slides in your deck
Financial operation or forecasts will be the most used slide in your deck
Don't insert deal terms into your deck. Investors want to structure deals according to their preferences.

Your deck should include data that addresses the topics beneath, and in the club set out to ensure optimal and logical advisory flows:

Purpose
Problem
Solution
Why Now?
Market Size
Competition
Production
Business Model
Team
Financials

The following example is based on a fictitious visitor and is not unlike Silicon Valley, the acclaimed one-act series on HBO. Assume Peter Hendricks, founder and CEO of Pied Piper is on the road to enhance finance. Using the construct and framework we've already prepare out, his story might look something like this:

ane. Purpose

"Pied Piper's mission is to connect to the globe through low toll, compression enabled data-driven interactions. We believe pinch-driven, neural enabled networks offer opportunities for users and companies to collaborate more frequently, more cost finer, and in a richer way than previously possible."

Key Takeaway: Allow the reader to understand that the commercial vision drives your mission.

2. Problem

"99% of the world'south data has been created in the terminal two years. Forth with the growth and explosion of information creation, capital expenditure on infrastructure has had to increase to keep abreast. Given the frequency and book of digitally-driven information enabled interactions daily, weekly, monthly and yearly, consumers and companies are spending unheard of amounts on information and Net costs to enable product usage and enablement.

This results in:

Annual expenditure of R20 billion past information-heavy companies, and an estimated R82 billion by consumers using Internet-based applications and tools.
Companies and consumers spending about R60 billion more than they should on data and hosting costs, due to cumbersome infrastructure and ineffectual architecture.
Average users waste matter nearly iii days annually waiting for files to load and information to buffer."

Primal Takeaway: Use data and numerical analysis to support your narrative. This volition brand your story more than conceivable and justifiable. Recollect, it's all about justification.

3. Solution

"Our always-growing data and Internet bills, capital investments and consumer facing latency could be solved by flexible, well-crafted compression software that reduces file sizes through the entire data lifecycle. Reducing file sizes will reduce data needed to remit, thereby reducing data costs, while lessening the need for capital investments to back up information storage and transmission. Equally such, we believe pinch holds the cardinal to unlock R45 billion in excessive consumer and corporate data spend, in improver to providing opportunities for these expenditures to be diverted from commoditised necessities to higher-yielding alternative investments."

Key Takeaway: Without divulging product or situational data, craft a story about how the problem might be solved. Demonstrating the effect of such a solution numerically will emphasise your betoken nigh the seriousness of the problem to whatever prospective investor.

4. Why At present

"We believe data and Internet services are becoming increasingly commoditised, thereby reducing corporate and consumer willingness to pay outrageous amounts for information consumption. Furthermore, we believe the current problems with data consumption will be compounded by the growth in mobile adoption and additional subscription for advice and social media applications.

The congruence of these events and occurrences will create a big and rich opportunity for compression based applications that volition reduce file sizes, slash data costs, and improve security."

Key Takeaway: The purpose of this section is to explicate why market and technological conditions are, or volition go, conducive to companies and consumers using your production, or products/services of a similar nature.

five. Market place Size

"By looking at our core target markets, we currently preside over a R3 billion market place opportunity." This estimate is based on the following supportive factors:

Our target corporate clients are media, financial services, medical and telecommunication companies, and we have segmented our consumer target market according to age and smartphone adoption.
In South Africa, we are currently targeting users aged xviii to forty, LSM 6 to 8. Given the application of our engineering, we wait these users to exist moderately tech savvy. Based on this sectionalisation, we estimate a primary population of 4,v million potential users.
From a corporate perspective, three media companies, two medical companies, four financial services companies and two telecommunications companies have a need for our product, and are willing to subscribe to our offering.
Based on our business organization and pricing model, nosotros judge our corporate cluster to be valued at R2,five billion, and our consumer cluster R0,5 billion, based primarily on advertising opportunities.

Primal Takeaway: You will often hear entrepreneurs say: "If I tin can just go i% of this market, we will generate billions in revenues."

That is top-downward analysis and investors will tear that line of logic apart. Always apply lesser-up assay. No matter how hard it is to find data or data that relates to your external market, reverse engineering defensible numbers is more oft the wiser and more defensible route.

Lesser-up assay allows for an articulation of the number of customers in the market place for your product or solution (defined according to the trouble identified and the number of people or businesses experiencing the trouble and in need of a solution), multiplied by the potential revenue in serving each customer individually.

6. Contest

"We believe Pied Piper is deeply differentiated from competing offerings, thus enabling u.s. to capture market share more easily and direct than some of our competitors. We believe our freemium model will allow for wide adoption, with additional attractiveness driven by our wide product and service adequacy.

"While our competitors are only able to shrink specific segments of data, the Pied Piper platform allows for data and advisory optimisation across all categories."

Key Takeaway: Use a serial of tables or matrices to measure relative offerings from competitors or substitute products in highlighting the unique characteristics offered by your production or service. Your competition slide should land simply and assuredly why your product solves the problem in a way that competitors can't. Yous should cover the following areas in your matrix analysis: (1) Price (two) Distribution (3) Funding raised (four) Business concern model (v) Key product features.

seven. Product

Outline what your product does.

Key Takeaway: Closely tie your product story into the PSM (problem, solution and market size). Explicate why your production is able to solve the problem outlined without repeating your solution narrative. Your product story should be a molecular assay of your engineering science, explaining why it constitutes a viable and defensible solution.

Moreover, your production narrative should be packaged and told in a manner that resonates with your market and opportunity assay inasmuch as information technology must fit the customer base outlined, and the budgets from which potential customers will subscribe to your offering.

eight. Business Model

"Our business model is 2-fold and relates to our cardinal target breakdown according to consumers and companies.

Nosotros plan to deploy a SaaS based model for companies, where they pay a tiered amount of R1 million monthly, which will increase in line with utilisation. This allows u.s.a. to align our interest with that of our clients, assuasive us to do good alongside them from the success of our production.
For consumers, we will deploy a freemium model to provide users with free access to our platform, allowing for low costs of acquisition and registration of a large base of potential users. We plan to use this base for cross-selling and up-selling of additional product and platform features, thereby monetising our consumer-based users.

Fundamental Takeaway: The business model slide is a bridge to the information ready out in your fiscal analysis. Country and explain how your business proposes to monetise its offer, advisedly setting out the underlying unit economics and key value drivers. Astute investors are ever on the lookout for untenable business concern models, so exist sure to know your key value drivers.

9. Team

Richard Hendricks — CEO

Feel: Software programmer for Hooli
Pedagogy: Information science degree from Stanford University.

Jarred Dunn — Business organization Development

Experience: Senior Vice President at Hooli focusing on strategic markets
Education: MBA from Stanford Academy.

Erlich Bachman — CMO

Experience: Founder of Aviato
Education: Computer Scientific discipline degree.

Betram Gilfoyle — CTO

Experience: Full stack software developer for a number of successful start-ups and corporates
Pedagogy: Available's degree from University of Montreal."

Key Takeaway: The purpose of your team slide is to demonstrate why you lot and your core team comprise the necessary skills and experience to brand your venture a success. Provide a short description of the backgrounds of your key team members and their skill sets, linking these to their current roles and responsibilities within your business organization. Such competencies should relate to disquisitional and important areas of your business or your key success factors. Think carefully about critical areas in your business, key human resources needed, and why your electric current team fills such gaps and requirements.

x. Financials

"Pursuant to our become-to-marketplace strategy, we aim to accomplish the financial performance set out below:

Interruption-even is at R12 one thousand thousand in acquirement, equating to one corporate customer or about 0,48% of the total market place.
With an investment of R10 1000000, we believe we volition reach a valuation of R400 million in 5 years, thereby offer a 10X render on our valuation of R40 million today."

Key Takeaway: Slides on your fiscal performance or outlook should not get into item that you tin can't justify and defend. Ideally, your fiscal slide should ready out any historical fiscal performance (for those of you in the seed or pre-seed stage, yous probably don't have whatever past fiscal information – don't worry), with a reasonable outlook for future prospects.

Thus: Last year'south fiscal performance, if relevant, with a two-to-three twelvemonth P&Fifty and cash flow outlook. Your finance slides should besides include a robust intermission-fifty-fifty analysis beyond a series of unlike scenarios. If you lot are not familiar with pause-even tables, get someone knowledgeable to assist you lot.

(Suspension-even analysis is crucial to understand, as most investors would want to unpack this early on. Investors use interruption-even as a uncomplicated metric to unwind applicable risks, decide the number of customers you would need to learn or products you lot would need to sell, and test the reasonability of your required customer base relative to the size and dynamics of the relevant market.)

In endmost, your deck should exist short, to the point, and relevant for investors looking for 10X growth in their investment. Yous will therefore need to explain why the market is large enough, why your product really solves a problem, and why you will be able to plough any investment into a real financial return.

Lastly, make sure you empathize your business and materials thoroughly, equally investors are sure to probe deeply. Nothing will terminate your meeting faster than a wrong number, a misunderstanding of your business, or if investors sense that you lot are waffling.

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Source: https://www.entrepreneur.com/article/328822