Harald Wagner runs the Munich Business Plan Competition and provides financing coaching at Baystartup. In an interview with us, he discussed what’s important when creating a pitch deck and what investors particularly pay attention to.
Hello Harald! What does the perfect pitch deck look like in your opinion?
There’s no universally perfect pitch deck. We’re not big fans of “This is the pitch deck that convinced Airbnb’s investors” articles either. As a startup, you need to tell your own story – and maintain the tension curve. If my pitch deck is addressing investors, I need to provide a certain level of detail. A 3-minute pitch probably works perfectly for a demo day where you want to tell a broad audience about your product.
But when pitching to investors, all the essential points of your business concept must be covered: the problem and its solution, product, business model, marketing and distribution strategy, market and competitive analysis, team, implementation roadmap and further roadmap, as well as financial planning must not be missing. Training the whole thing to fit 8 to 10 minutes depending on the event, with approximately 12 to 15 slides, is a pretty good benchmark in my opinion. But just a benchmark.
“The eye eats with the mouth”
What do founders need to pay attention to when creating it?
“The eye eats with the mouth”! Of course, slide design plays a secondary role for a real high-tech startup. On the other hand, the pitch deck does make a first impression, and that should be professional. The pitch deck should demonstrate a certain level of maturity in the startup’s corporate design, even if ultimately you convince with content.
Then – as trivial as it sounds – readability is certainly a noteworthy aspect, meaning font sizes and colors as well as contrasts. Slides also shouldn’t be too cluttered. Key bullet points and graphics that explain relationships and processes make sense, but not long, fully written-out text lines. It must be possible to skim the slides while listening to the presenter and still find what was said. Often you have to choose: do I read the slide content now or do I listen to the presentation? This must be avoided at all costs.
Another extreme: the presenter’s “soundtrack” doesn’t have much to do with the slide content anymore. The soundtrack should be understood as the detailed version of the slide content, not an excursion into the pitcher’s thoughts. You need good judgment here regarding how to distribute content across slides to avoid too much complexity but also avoid overly hectic “channel surfing”.
Particularly important: the team!
What do investors pay special attention to in a founder pitch?
Certainly first and foremost, whether a real problem is being solved in a way that’s clear to everyone. If the problem solution – the product – is convincing, investors want to dive much deeper. How does the distribution strategy work? Are there already initial experience values and metrics? Do you even understand your distribution strategy? Can it be implemented sustainably and profitably?
Information regarding sales cycles, customer acquisition costs, and lifetime values should be included, and industry- or business model-specific metrics like conversion rates or click-through rates, etc. must not be missing. You must also address where the financial journey could go. Credibly supported without anyone actually believing in the projected revenue figures, with a well-thought-out market entry strategy and also a plausible approach for how you’ll scale into the growth phase.
And of course, don’t forget: the team. But I mean less the “polished” CVs on the team slide (not uninteresting either), but rather whether it’s a well-coordinated group. Do they communicate with each other on the same level? Do they let each other finish? Does each team member know, based on their expertise, what to say and when on which topic? Do you believe the founding team is capable of sales success? Are the founders willing to get their hands dirty?
A clear narrative: yes! – Memorization: no!
What mistakes do founders frequently make when pitching?
A cardinal mistake isn’t really in the “pitching” 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 an elaborated 30-page business plan.
However, you must absolutely distinguish between a pitch deck that only makes sense together with the presenter’s “soundtrack”, and an elaborated slide set – let’s call it a “reading” or “investment deck” – that is self-explanatory in its level of detail and provides all essential information. In short, a slide set that includes all the essential formulations that appear in the live presentation as explanatory text, explores certain topics with additional slides, and perhaps takes one or two items from backup slides into the main part.
Pitching is a matter for the chief!
The pitch itself shouldn’t sound like it’s been memorized. Speaking thoughts sound authentic. I’d rather have a few more “umms” in my presentation than not reach the audience with memorized text. Of course, you should practice a narrative thread, just to stick to the usually set time limit, but please no memorized formulations.
The pitch should also be tailored to the audience and the occasion. A sales pitch is not an investor pitch, and even if it’s a B2C product, you shouldn’t pitch the investor with platitudes as if you’re trying to win them as your next customer. And one more thing: pitching is a matter for the chief! So someone from the founding team – preferably the extroverted “sales shark” – and not necessarily the visionary just because they originally had the idea and you don’t want to hurt their feelings.
Beware of too much storytelling!
What are absolute no-gos?
There are many: reading the slides word-for-word for example, or even better standing on stage with presentation cards like in a school presentation. Comparisons like “We are the Uber of the XY industry” usually fall short too. And even if some don’t want to hear it, too much “storytelling” is also crap. Of course, it’s nice to use a story when presenting the problem and leading to the solution. But too much “storytelling” usually means you’re only scratching the surface (perhaps perfect for the next demo day) and you usually lose valuable time that could have been used for deeper content. I also wouldn’t include my valuation ideas in the pitch and I’d skip dubious return-on-investment calculations. That usually just brings up unnecessary discussions.
How can founders differentiate their pitch from the crowd, for example in a competition?
Apply the 5-A rule: “Start differently than everyone else”. Good preparation with a stopwatch creates confidence. Go into Q&A well prepared with backup slides. And best of all, just stay as natural and authentic as possible. Honest, likeable conduct usually scores more points than arrogance.
Thank you for the interview!
Harald Wagner – MBA, Dipl.-Betriebswirt
Harald Wagner runs the Munich Business Plan Competition and provides financing coaching at Baystartup. Baystartup supports founders and young companies in optimizing their strategy, building their company, and finding founding or growth capital. Through the Baystartup investor network, founders have contact opportunities with more than 300 listed business angels and over 100 institutional investors.
