A first aid kit from the startup incubator and technology hub Business Hive Vilnius (BHV)
OK,
startupers. You’ve made a great product. Your team is perfect. The
market is ready for you. Or you’ve almost run out of money. Now it’s the
time to raise some funds.
You
need a good pitch deck. No, it is not simply about writing ten clever
sentences about your great startup. And no, this is not about making a
50-page Word document. And no, please, this is not about a wonderful
informal presentation with images of your team in hoodies.
The best possible startup pitch deck is a presentation which consists of ten slides. Here they are.
FIRST SLIDE
This
is (surprise!) an elevator pitch or a brief product description. Be
clear. Forget the phrases, like ‘Uber for developers’, or ‘Airbnb for
dogs’, no one is going to read any further. Tell us exactly what do you do, who you do it for, and what problem does it solve.
Bad example: We built a disruptive service in a food delivery industry.
Good example: We built a mobile app for dog lovers, which helps them to urgently order pet food delivery from the nearest store.
THE PROBLEM
What
problem do you solve? Are you absolutely sure that this problem really
exists? Be very specific in describing in. By the way, figures always work well.
Bad example: Dog owners need a food delivery service.
Good example:
Statistics confirm that 32% of dog owners in the USA faced the problem
of running
out of dog food in the mornings, just when they are rushing
to work, or, in the evening, when the nearest stores are already closed.
We offer a delivery service which helps to solve this problem, ensuring
that your pet won’t starve, no matter the time of day.
TARGET AUDIENCE
Where
is your market geographically and who is your customer. What is his/her
age, gender, lifestyle, where do they work, how do they spend their
free time, what are their insights? The more you know the better it is
for you and your business. Statistics and competitor analysis will help
you to better understand the market size in numbers.
Bad example: Our customers are dog owners.
Good example:
Our customers are small and medium size dog owners, living in big
cities in USA, white collars, lonely or in a relationship, mostly not
married/no kids, age; 25–40. There are 30 million potential users of our
App in the USA alone, with an annual market turnover of 0.5 billion
USD.
USER ACQUISITION STRATEGY
How
and where will you search for your users? Tell us exactly; where they
are, how you reach them, and how much it is going to cost per user?
Remember, your user acquisition cost has to be really low at this point
and break even during the first 12 months, otherwise it simply won’t
work.
Bad example: We will make ads in Facebook.
Good example:
Our copywriter will write articles about dogs for dog-lover websites,
where we will describe our products to users and offer free trials. Our
user acquisition cost will be 0.10 USD per user, and we are planning to
target 50,000 users with this channel. (And now you may talk about other
channels).
COMPETITION
Competitors always exist, even is you are inventing a new way of doing the same thing. The main reason to invest in you is not
that you are more innovative, but you are more effective. Think
carefully about the traditional market. Think about the digital market.
What are your advantages? Create a chart or illustration where you
compare your model against your competitors, through different
categories.
Bad example: We are a disruptive service with a user-friendly interface.
Good example: Create a comparative table and add ‘+’ and ‘-’ to each cell. Be sure that your model contains all the ‘+’s.
MONETIZATION
How
many of your customers are willing to pay for your product? How much
are they willing to pay? How much they are already paying? Are there any
possibilities that they can pay more? Yes, we are talking about exact
numbers. What is the share of paying customers for your product?
Bad example: We are going to monetize via advertisements in our app.
Good example:
Our customer pays $10 for each delivery. In 6 months we will introduce
an additional service where customers will pay an additional $5/month
for subscription. 30% of our registered users are paying customers.
TRACTION
Where
are you now? What have you delivered so far? Do you have paying
customers? Do you have any customers at all? What have you already done
to attract your customers?
Bad example: We are developing an application and looking for the investment.
Good example:
– We have developed a beta version of our app and launched it in the App Store
– We have 500 installations this week
– The number of installations grows 100% each week
– We had 20 paying customers in the 2 weeks directly after launch
– We have arranged meetings with 14 potential partners, 2 partners have already signed the contracts.
TEAM
Investors
never invest in a product at this stage, they invest in a team. So,
this slide should be the main component. Reveal all you can about the
founders and the key team members’ expertise and achievements, this
slide must be highly convincing. Also the pictures have to be
attractive, we realise it’s not Tinder, but it’s still all about
matching.
Bad example: We are a team of professionals, which includes 2 designers, 3 developers, and 1 CEO.
Good example:
Our founder, John Smith, started his first business at the age of 15.
During the last 3 years he has performed as a deputy CEO at “Happy Dog”
(Pet food chain), where he successfully increased the turnover of the
company twofold.
WHAT’S NEXT
What
exactly are your plans for the period of 6–12 months after initial
investment? Which milestones in product development are you going to
reach? How many users are you going to gain? How much money are you
going to earn? Which markets are you planning to enter? Keep in mind,
that actual figures are much more convincing than vague descriptions.
Bad example: We are planning to finish the product development and to enter the US market
Good example:
– Launch the mobile App in 2 months
– Develop the AI for logistics
– Attract 150,000 new users to our app, 30% of them will be paying customers
– Make 20 new partnerships with pet shop chains.
INVESTMENT PROPOSAL
Finally.
Investment proposal. What amount of money are you looking for? Who is
the investor of your dreams? What would your investor get for their
investment? What’s the exit plan for the investor? How will you spend
your investment money?
Bad example: We are looking for 1,000,000 USD
Good example:
We are looking for 1 million USD for 10% equity from the
fund — operating in the retail industry — to be spent on further product
development (70%) and marketing (30%). Our plan is to reach 20 million
turnover in 2 years and to offer the investor exit during the M&A
(possible buyers: ‘Red Dog Food’ and ‘Happy Dog’).
Good luck with your fundraising,
Bitcointalk profile: redtrust
https://bitcointalk.org/index.php?action=profile;u=1726043
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