When you are pitching to investors, you want to prepare to use your time wisely and it is best to assume that you are not going to have a lot of time. Investors are constantly get pitched, so it’s important to catch their attention quickly and engage them by keeping it simple.
The first step towards landing a new funding round begins with a strong startup pitch deck.
The best startup pitch decks include the following components:
- Target Market
- Business Model
Before reviewing these components, please note, you may need to include another slide, additional information to a few of your slides or add a bit more detailed verbiage when speaking about each of your slides. Having a business in the cannabis industry, you need to understand who you are pitching to. Are these investors in the cannabis industry? Are they new in the industry? Have they invested in a cannabis business before? Review their portfolio.
If they are new to the cannabis industry, you will want to include additional information about the cannabis industry as a whole. You may need to explain in more detail about the business model, the problem you are solving, why it is a problem and so forth.
What is the problem that your product or service is really solving? Is it really a problem? The most successful startups have built a product or service that solves consumers’ problems. Use this slide to talk about the problem that you are solving and how consumers will benefit from your targeted solution. Ideally, this section will tell a relatable story.
What’s your solution to the problem? What is the solution you are delivering, how will it make the customer feel or what result will it give them? You will be showcasing how your idea is best placed to solve this problem
3. Target Market
How big is the market? You need to show your market size, trends, and possible penetration. It is important that you have an understanding of how will you get to them? This is the marketing and sales component.
This section should highlight key team members, their experience, and the key expertise that they bring to your startup. Don’t be afraid to talk about their experience at previous organizations or businesses and why they are a huge asset to your business.
Before seeking financial investment, it is best that founders gain some early traction and hit a lineup of milestones. Have you launched an MVP or prototype? Do you have revenue and customers? Traction will be required before you raise capital. Traction is a priority in your presentation – it changes the discussion from theory to reality. Tell investors about the growth you’ve achieved thus far and how a new funding round might expedite that growth.
6. Business Model
Overall, this slide should speak to the unique operational and functional capacity of the business. How does the business work? How does the business make money? Ideally, your startup’s business model will be unlike any other. What new mechanism or marketing strategy does your business use to drive greater profits?
The number one mistake most startup founders make is saying that they are without competition. Having no competition is a major red flag- it either shows you haven’t done your research or worse this idea may not be an actual problem that needs to be solved.
Remember, every startup has at least one competitor. This section should talk about other entities in the marketplace. What are your competitors doing? Moreover, what are they doing wrong? Show investors how your startup’s product/service is superior.
A brief summary of your financials- be sure to include key metrics such as the number of customers and conversion rate. Make sure you don’t depend on a screen capture of your income statement to tell the financial story of your business.
Finally, the last section of your startup pitch deck state how much are you raising and where the funds will be allocated and why they are necessary to grow the company. If you have raised capital previously, this would be a good place to include how much and from whom. The ask is one of the most important sections in your pitch deck. Be sure to back up this number with plenty of data and expert insights.
Don’t simply explain that the funds will pay yours and your co-founder’s salary for a year. That is not what the investor is interested in, tell them what it will actually get the investor – raising $500K will get us through MVP launch and the first 100 customers. Pick real (believable) milestones you can hit with the capital requested.
Don’t forget your call to action – is your contact information on the deck?
There are a few general pointers to keep in mind. Clearly label each slide — problem, solution, team, etc — so the deck can be scanned easily. Keep the slides simple, without a ton of text. Present charts and stats in large fonts with bigger graphics.
Once you build the deck, get feedback from your advisors and other founders. Then go and field-test it. Be self-critical and listen carefully to feedback from potential investors.
Over time you will have many variations of your pitch deck, however, don’t rush to change your pitch deck after every conversation with a new investor. Makes notes and if you start receiving similar questions on the same slide then review the feedback and questions and work on making that slide clearer.
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