What’s an Investor Pitch Deck?
You have it, your big idea, you have a solution to all the world’s problems and indeed if not all of the world’s the big fat one that you’re facing: you’re poor and this idea could make you rich! You talk to everyone you can find, you talk to your parents, you talk to children, you talk to your brothers and sisters, you talk to aunties, neighbours, people on the streets, bus drivers, receptionists. Eventually you come across someone who not only looks rich they are rich! They’ll listen to you and maybe even then invest in you. And then at the end of your conversation they say to you ‘ping me over your pitch deck’ and you say ‘fine, yeah sure, I’ll do that tomorrow’. You leave and you think to yourself ‘what’s a pitch deck?!!’
What is a pitch deck? The mythical pitch deck, I haven’t a clue, if you Google pitch deck on the internet you will find lots of different definitions. I tend to ignore them all and I’ve come up with my own three rules around pitch decks and how to use them. Investors need different levels of information depending on where they are with their journey with you and that defines what you send and what you use when you speak to investors.
Three Levels of Information
You have three levels of information that you need. The least amount of detail is the information you put on slides that you present to investors. Ideally these slides just contain images and you speak to the audience of investors and the images supports your pitch. If an investor says to you ‘ping me over your pitch deck’ you need to send that investor slides but, of course those slides that you present with are accompanied with your narrative.
So what do you need to do? You need to take those same set of slides and start to write a narrative along with the slides. Take a typical slide halve it, on the left hand side have your narrative describing the proposition that you have and images supporting your proposition. In something like a pitch deck you’re presenting live you would have only five slides, so you’ll see that the email that you send over to a prospective investor will have more information. But that information also needs to be the kind of information that will pull the individual through to the very final slide.
If you send an investor a set of slides which has too many slides that investors heart will sink. They receive countless proposals and they want something that’s easy to understand and that says to them ‘do I want to take this discussion further?’
If you meet an investor at a networking do and they say to you ping me over some slides what they’re really saying is I’m not going to give you the opportunity to pitch to me but send me over something so that I can assess whether or not it’s worthwhile me spending the time listening to you pitch to me. That’s really the communication that they’re making, so let’s say then that you have live pitched and you have sent them over your pitch deck, what then more information do we need?
Something which is full of facts and figures, full of information and that’s called an information memorandum. An information memorandum is something which the investor will see as a marketing ploy but at the same time you need to write it as though it has all the salient facts in there. All the risks, all of the downsides, do not hide anything. A really good way of describing an information memorandum is it’s like your company’s C/V. Do not lie when you promote it, when you send out your information memorandum one of the advantages is that you can send that same document out to multiple investors and the fact that you’ve done that means that they’ve all received the same level of information. Whereas in a pitch to investors each time you live pitch you are going to be slightly different but with your information memorandum you’re not.
With the information memorandum make sure that in there you have salient information, such as how much money you want for what levels of equity.
I have put together information memorandums in the past and they have gone in levels of detail from 50 pages to 250 pages, that’s how much information you could be possibly put in an information memorandum. Now a good trick that investors will use on you is they will say to you ‘send me over your information memorandum’ and if you haven’t got one you’re in a bit of trouble, it shows you’re not investment ready.
So one of the best things you can do is when you start pitching your idea, start in parallel an information memorandum anticipating the investors request for that document.
In conclusion I don’t really know what a pitch deck is, what I do know is there are three things that you’ll be looking to send over to an investor. Set of slides that you pitch to live. Those slides that have a narrative in there and finally an information memorandum which is like your company’s CV. Have all of those three things in mind when you speak to an investor and be sure you send him or her the right thing.