Harald Wagner heads the Munich Business Plan Competition and the financing coaching program at Baystartup. He spoke with us in an interview about what's important when creating a pitch deck and what investors are particularly looking for.
Hello Harald! What does the perfect pitch deck look like in your opinion?
There's no such thing as a universally perfect pitch deck. We don't believe in "This is the pitch deck Airbnb used to convince its investors" articles either. As a startup, I have to manage to tell my own story and maintain the suspense. If my pitch deck is aimed at investors, I need to provide a certain level of detail. A three-minute pitch is probably perfect for a demo day where you want to tell a broad audience about your product.
However, the investor pitch should address all the key points of your business concept: the problem and its solution, the product, the business model, the marketing and sales concept, the market and competitive analysis, the team, the implementation plan and roadmap, and the financial planning. Depending on the event, I think a good guideline is to cover the whole thing in 8 to 10 minutes, with approximately 12 to 15 slides. But that's just a guideline.
“The eye eats with you”
What do founders need to consider when creating a plan?
"It's a feast for the eyes!" Of course, slide design plays a secondary role for a true high-tech startup. On the other hand, the pitch deck makes a first impression, and this should be professional. The pitch deck should demonstrate a certain level of maturity within the startup's corporate design, even if the content ultimately wins over the audience.
Then—as banal as it may sound—readability is certainly a consideration worth considering, including font sizes, colors, and contrast. Slides should also not be too cluttered. Key points and graphics that explain connections and processes are useful, but not long, drawn-out lines of text. It should be possible to skim the slides while listening to the presenter and find what's being said. Often, you have to decide whether to read the slide content or listen to the presentation. This should be avoided at all costs.
Another extreme: the presenter's "audio track" no longer has much to do with the slide content. The audio track should be understood as a detailed version of the slide content, not an excursion into the pitcher's thought process. Here, a good sense of nuance is required when distributing the content across the slides to avoid excessive complexity and, at the same time, overly hectic channel-hopping.
Especially important: the team!
What do investors pay particular attention to in a founder’s pitch?
First and foremost, surely, is it a clear solution to a real problem for everyone? If the solution, i.e., the product, is convincing, investors will want to be more involved. How does the sales concept work? Are there any initial experiences and key performance indicators? Do you even understand your sales concept? Can it be implemented sustainably and profitably?
Information regarding sales cycles, customer acquisition costs, and lifetime values should be included, as should key metrics specific to the industry or business model, such as conversion rates or click-through rates. The financial direction of the journey must also be addressed. This should be credibly substantiated, without anyone actually believing in the projected revenue, with a well-thought-out market entry strategy and a clear approach to scaling toward the growth phase.
And, of course, let's not forget the team. I'm not talking about the polished resumes on the team slides (which aren't uninteresting either), but rather whether the team works together as a well-coordinated group. Do they communicate on the same level? Do they let each other finish speaking? Does each team member know who, based on their expertise, has what to say about each topic and when? Do they trust the founding team to achieve sales success? Do the founders want to get their hands dirty themselves?
Common thread: yes! — Memorization: no!
What mistakes do founders often make when pitching?
A cardinal mistake doesn't lie in the "pitch" itself, but rather in thinking you can simply send pitch decks to investors. Certainly, these days, the compact document is more popular with most investors than a fully written 30-page business plan.
Nevertheless, it's important to distinguish between a pitch deck, which only makes sense with the presenter's "soundtrack," and a fully written set of slides, let's call it a "reading" or "investment deck," which provides all the essential information in a self-explanatory, detailed manner. In short, a set of slides that encapsulates all the key phrases used in the live presentation in explanatory text, expands on specific topics with additional slides, and perhaps incorporates one or two elements from the backup slides into the main body.
Pitching is a top priority!
The pitch itself shouldn't seem memorized. Speaking your mindset seems authentic. I'd rather have a few more "uh-huhs" in my presentation than fail to engage the audience with memorized text. Of course, you should have a common thread, if only to stick to the time limit, but please avoid memorized phrases.
The pitch should also be tailored to the audience/occasion. A sales pitch is not an investor pitch, and even if it's a B2C product, you shouldn't bombard the investor with platitudes as if you want to win them over as your next customer. And one more thing: Pitching is a top priority! So, it should be someone from the founding team—preferably the extroverted "sales whiz"—and not necessarily the visionary, just because they originally came up with the idea and you don't want to offend them.
Beware of too much storytelling!
What are absolute no-gos?
There are many: reading the slides one-to-one, for example, or even better, using presentation cards like you're on stage at a school presentation. Comparisons like "We're the Uber of the XY industry" are also usually lame. And even if some people don't want to hear it, too much storytelling is also rubbish. Of course, it's nice to use a story when presenting a problem and leading to a solution. But too much storytelling usually means you're only scratching the surface (perhaps perfect for the next demo day), and this usually results in valuable time being lost that could otherwise have been spent on more in-depth content. I wouldn't include my valuation proposal in the pitch, and I'd also avoid dubious return-of-investment calculations. That usually just leads to unnecessary discussions.
How can founders stand out from the crowd with their pitch, for example in a competition?
Apply the 5-A rule: "Start differently than everyone else." Good preparation with a stopwatch creates confidence. Go into the Q&A well-prepared with backup slides. And best of all, just remain as natural and authentic as possible. An honest, personable demeanor usually scores more points than arrogance.
Thank you for the interview!
Harald Wagner – MBA, Dipl.-Betriebswirt
Harald Wagner heads the Munich Business Plan Competition and financing coaching at Baystartup. Baystartup supports founders and young companies in optimizing their strategy, building their businesses, and finding start-up or growth capital. About the Baystartup investor network Founders have the opportunity to contact more than 300 listed business angels and over 100 institutional investors.
