Basics  of  a  Pitch  Deck  Founders  &  Funds  –  Startup  Special!  

Contents    Stages  in  a  startup    

  Problem  statement    

  Solution  that  you  envisage  

  Market  size  

  How  will  it  work  –  Business  model  

  How  will  it  make  money    -­‐  Revenue  model  

  Competition  –  how  you  differentiate  yourselves  from  the  rest  

  What  has  happened  so  far  –  Traction  numbers,  amount  spent,  timeline  

  Unit  economics  

  What  is  the  plan  for  the  future  –  tie  it  to  the  funding  ask  

  Team  

Stages  of  a  Startup  

Idea  

Market  research  

MVP  

Traction  

Expansion  

Alpha  -­‐  "this  is  mostly  sort  of  kind  of  what  it  should  do"    Beta  -­‐  "this  is  the  finished  product  except  for  all  the  stuff  we  don't  realize  we  haven't  finished  yet"      

Problem  Statement    Highlight  the  most  critical  use  case  that  will  be  appropriate  for  your  product/service.    

  The  problem  must  illustrate  a  pain  point.  The  statement  must  show  why  it  is  a  need.  Videos  work  best  for  showing  multiple  use  cases.  

  Differentiate  between  need  and  want.  Most  typically,  this  will  involve  a  segmentation  of  your  target  market  (e.g.,  luxury  fashion,  high  end  dining).  

Solution  -­‐  Visualization    How  does  the  solution  work?  

  How  does  it  reach  the  customer  (phone  call,  mobile  app,  internet,  offline  presence)?  

  Showcase  your  innovation  -­‐  the  value  addition  you  bring  to  the  table.  It  could  be  a  product  that:    Reduces  cost  (MySmartPrice)    Increases  convenience  (Freecharge)    Reduces  time  (Bankbazaar)    Provides  a  Return  on  Investment  (Linkedin)  

Problem  –  The  Magnitude    The  total  number  of  people/transactions  actually  needing  this  solution.  

  Research  the  web  for  credible  sources  of  data  (PwC,  Forrester,  WSJ,  etc.)  

  Done  any  primary  research?  Show  your  survey  results.  Show  specific  pain  points  talked  about  by  the  people  surveyed.  How  much  were  they  willing  to  pay?  

  Anyone  in  other  parts  of  the  world  facing  this?  Showcase  how  other  countries  are  tackling  it.  

Market  Sizing    In  terms  of  numbers  (already  done)  

  In  terms  of  value  

  It  needs  to  be  a  logical  deduction  from  a  well  known  fact.  Well  known  facts  start  with  the  country  level  data.  (population,  households,  labor  force,  etc.)  

  Don’t  forget  the  internet/mobile  penetration  that  can  significantly  bring  down  your  market  if  you  are  a  mobile/internet  app  service.  

  What  is  the  nearest  substitute?  How  much  does  it  cost?  This  will  be  the  upper  limit  on  the  pricing  of  your  service.  

The  business  model    Stakeholders  in  your  business  -­‐  Suppliers,  vendors,  partnerships,  clients  

  Show  the  flow  of  services  from  one  end  to  the  other.  

  The  services  should  be  very  clearly  defined  (for  e.g.,  in  a  grocery  delivery  business,  the  entrepreneur’s  product  would  take  the  order  and  inform  the  grocery  shop,  the  grocery  shop  would  deliver  the  order  and  the  entrepreneur  would  pay  the  grocery  shop).  

  The  business  model  would  ideally  be  able  to  showcase  how  your  product  innovates  a  conventional  business  model  to  create  a  value  addition  (revenue/cost/convenience)  as  well  as  scalability.  

Revenue  Model    Revenue  channels  and  pricing  

  Who  are  the  segments  you  are  targeting  and  what  is  their  pricing  profile  (high  end,  discount  driven,  value  driven)  

  Is  there  a  way  to  target  different  segments      B2B/B2C/B2B2C  Freemium  model  

  Subscription  vs  one-­‐time  pay  models  –  Amazon  Prime,      Pay  as  you  go  model  

Competition  –  So  far    

  The  usual  table  is  a  hygiene  factor  for  those  investors  who  are  very  conversant  with  your  sector.  

  Always  highlight  the  key  differentiator  between  you  and  the  competition.  (Team,  Early  mover,  Partnerships,  etc.)  

  The  immediate  validation  of  your  key  differentiator  would  be  the  question  ‘how  will  you  protect  this  advantage?’.  Make  sure  you  know  the  answer  to  this  question  as  it  relates  to  the  sustainability  of  your  business.  

Traction!    Only  some  vanity  metrics  are  good  (number  of  downloads  is  not  one  of  them).  

  Highlight  repeat  behaviour  as  much  as  possible  (number  of  engagements,  number  of  transactions,  growth  in  transactions).  

  For  a  seed  stage  startup,  100%  M-­‐o-­‐M  growth  is  what  the  angels  want  to  see.  

  Cohort  Analysis  is  a  sure  shot  ticket  to  knowing  and  improving  your  traction,  and  showcasing  this  knowledge  to  the  investors.  

Way  ahead    Predict  at  least  4  quarters  

  Have  clear  targets  that  are  reasonable  given  the  amount  of  funding  you  will  be  asking  for.    

  Give  a  breakdown  in  pie  chart  format  for  the  utilization  of  your  funding.  

  Mention  how  it  will  add  value  to  the  business  (e.g.  CTO  for  product  development)  

DILUTION:  50-­‐75  L  –  8  –  10%  1  cr.  –  10  –  15%  2  cr.  –  18  –  22%  3  cr.  –  22  –  25%  >4cr.  -­‐  >25%  (depends  on  traction)  

The  Team    Mention  succinctly  the  role  and  the  USP  they  bring  to  the  table  

  Background  should  come  on  the  slides  

  If  one  of  them  is  not  at  the  pitch,  mention  why.  If  anyone  is  still  in  their  day  jobs,  mention  why  (it  is  a  huge  red  flag,  btw).  

  A  key  criterion  for  funding  is  academic  credentials  (don’t  ask  me  why!).  

Next  Time  Financials  for  fundraising!  

 

Thank  You!  Credits  –  Jose  Kuttan,  Co-­‐founder  (WeavedIn)