Your pitch deck should be between 8 to 12 slides. Each slide counts toward selling your startup and getting VC funded. But some slides are more important than others and are almost what land funding for your startup. These slides are (1) The traction, (2) Team, and (3) Market, in no particular order.
The Traction Slide
If done right, your traction slides deliver a lot of messages about your startup: 1. You already have a usable product that generates value for your users. 2. You have done serious work to bootstrap and validate your startup. 3. Depending on the traction, it shows that you have the foundation to move fast and a higher possibility of finding the product market fit.
What should be in the traction slide?
The traction slide reflects users’ interest in your product and idea. The traction can be demonstrated with one or more of these metrics.
Revenue/Profit. Having paid customers is the best form of validation. Show health revenues; even better if you can show profits.
ARR. Annual Recurring Revenue shows healthy and high-quality SaaS recurring revenues. Recurring revenues and SaaS dynamics mean that you are onto something.
Active users. If you’re growing your number of users exponentially without necessarily knowing how to monetize them, that’s still an impressive number to show. If you can show that you can build a huge, sticky audience, you can probably find a way to make money off that down the line.
Sign-ups. If you’re seeing huge growth in the number of sign-ups to your product or service, but they aren’t generating revenue or sticking around, there’s still value in that — although your traction slide should be paired with a solid “How is this going to make money?” slide.
Patterns that you should demonstrate?
Showing metrics is not enough. It is about the patterns that your business is experiencing. You need to demonstrate these qualities in your traction metrics.
Fast growth. You want to show some metrics, such as sign-ups, the rapid growth of users, and continuous inertia; ideally, you want to show exponential growth.
Efficient user acquisition. How you are acquiring these users is also key. Is it through organic or paid growth? Organic trumps all other means.
Healthy funnel. If you are using sign-ups, do you have a clear way to move users from one stage to another in healthy percentages to become paid customers?
The Team Slide
The team slide is always important. However, it is extra critical in the early stages. It tells if the team has the qualifications to move fast, pivot, and explore new ideas if the current idea is not working. Specifically, you need to demonstrate that your team has one or more of the following qualities:
Previous startup experience. Does the team, or at least some of its members, have startup founding experience? 2nd or 3rd-time entrepreneurs have a 60% chance of success, and 30% for first-time founders.
Special expertise. Does the team have some deep industry expertise that will help them move fast in product building and customer discovery?
Previous joint experience. Did the team work together before? One of the top 5 reasons for startups’ failures is founding teams fighting or disintegration. Previous co-working experience improves the team's chances of enduring the startup journey's dark times.
Customer knowledge. Can the team attract the right customers? Do they understand how their customers think and intercept their needs at the right time, with the right message?
The Market Slide
The market slide shows how big the opportunity is and how big your startup can be. Therefore it is important to demonstrate the following in this slide:
A massive market going through some changes or disruptions will allow your startup to sneak into and gain market share very quickly.
A rapidly changing market*. Startups are limited in time, and moving fast is their only advantage. If the market changes over many years, you lose your advantage. Large enterprises will easily catch up and drive you to exhaustion.
Hot market. If you are starting a company in a hot market, you’ll probably get more meetings than if you are not. Crypto, drones, micro-mobility, social influencer marketing tools — they’ve all had their time in the sun. If you happen to be riding a wave, you’ll be doing well. Because investing in early-stage startups has a lot of guesswork and personal convictions, investors get into the FOMO (Fear of missing out), and bidding wars escalate quickly.
What if you don’t have these slides?
If you can’t find strong enough points for each of these slides, you probably need to go back to the whiteboard and fix what is broken in your idea. Investors can sense these weaknesses very quickly. Your pitch deck is your startup’s blueprints. If the blueprints don’t make sense, you won’t be able to build a high-velocity and enduring business.