How to prepare a pitch deck for a SaaS investor


10 Mar 2020531 Views

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Preparing a pitch deck is vital for start-ups but it’s not as easy as it sounds. Storm Venture’s Ryan Floyd offers his advice.

Creating a slide deck that showcases your company’s strengths might seem simple – you’ve probably done it countless times to potential customers. But creating one to pique the interest of an investor is different. It has to be clear yet compelling and give the investor a call to action.

I’ve seen thousands of CEOs and entrepreneurs fail to get investment just because their presentation deck was uninspiring and formulaic, even if their start-up was anything but. So, how do you make sure your pitch deck is well prepared and engaging?

The opening slides

Start the deck off with two or three slides that instantly give your audience a reason to listen. Highlight whatever your strength is first. Generally, this will be either the vision, your customers or your team.

If your vision is your unique selling point, then find a way to depict and articulate that in the opening slides. It should answer ‘why now and why you’, and it should explain the product or service in clear, simple terms.

If your team is strong, then have a slide at the front of your presentation that highlights their experience. This is advisable if your results are still early.

If you already have strong traction with your market, then this should be one of your leading slides. Paying customers, especially happy ones, are the ultimate measure of your success, so tell the potential investors about them immediately.

The metrics

An investor wants to spend money on your business because they believe it will make them money, so you need to convince them of the financial potential with metrics.

The quantitative story becomes more important as you move from early stage to a mature business, until eventually the numbers do almost all of the heavy lifting. Investors will tell you they want to see your vision, but your vision is easier for them to see when the numbers back it up.

Don’t forget to include a slide on sales efficiency and how you’ve calculated it. Generally speaking, for a SaaS business, your sales efficiency ideally is one or more. For example, that would mean you spend €1 to generate €1 of new annual recurring revenue.

If your figure is good, give a short narrative around it. You may not have enough sales yet to really focus on this metric, in which case look elsewhere like average contract value (ACV).

Avoid general statements like, “We grew 1,000pc”. That won’t impress an investor. They want to see examples with real metrics. The 1,000pc growth rate is interesting obviously, and may be a real metric, but it’s not realistic going forward. You are more than likely calculating off a very small base.

An example of ACV growth is, maybe you started selling at €25,000 ACVs, but over time you have been able to grow the ACVs to €50,000. This is great because it shows that you are learning more about what resonates with the customer and how to establish value.

A head and shoulders shot of a smiling man with dark hair and a grey shirt.

Ryan Floyd. Image: Storm Ventures

Show you understand your market

It’s crucial that you explain what your customers’ problem is that you’re solving – and the solution. Take the perspective of your actual customers (real or imagined, depending on what stage you’re at) and outline the specific sector you’re going after instead of a generic total addressable market. That’s not useful because there are billion-dollar markets everywhere. Instead, use customer case examples to explain how and why they will use your product.

Secondly, don’t be scared to mention your competitors. Being transparent about risks reveals that you’re thinking about the business beyond the pitch. If asked about them, don’t give a canned and pre-packaged answer. An investor is going to expect some competitors if the market is interesting and they just want to know why you will win. It shows them that you can see where the gaps are in the market.

Preparing for meeting

When it comes to the meeting day itself, make sure you have considered what it is about your business that the investor finds interesting. If it’s an investment firm, figure out where their intent lies. Maybe they have a whole portfolio of companies like yours and want to complete the set, or they made a similar investment that didn’t work out.

You should know your potential investor’s portfolio of current and past companies, successes and failures alike, whether they have invested in businesses similar to yours, whether there are any deals that have gone sour to avoid mentioning.

On a deeper level, research the actual partner you will be talking to. The firm may operate as a team, but you have to convince a specific person to bet their career on you, so if you can find things in common with them, all the better.

The meeting

During your meeting, someone will likely challenge you on something. Even if they’re wrong, don’t argue. Take it as an opportunity to engage and to teach someone something rather than being defensive. Trying to get them to invest by arguing with them will not work.

You might occasionally run into someone who has just decided to treat you poorly. In those (hopefully rare) cases, move on and don’t analyse it. It’s probably their issue and it means they aren’t the right investor for you.

My biggest advice is to pretend it’s a seven-minute meeting. Technically, you might have as much as an hour in the room, but pretending you only have seven minutes will ensure you remain focused and deliver key messages.

Get feedback

Finally, learn something from every pitch. Just like a job interview, ask yourself afterwards what you could have prepared for and write down the questions you were asked so you can pre-empt them next time.

There’s no rule against practising your pitch, too. Ask friends to act as investors and grill you and then give honest feedback. Ask them to bring their friends so you can practise giving your pitch in front of strangers.

If you can’t remember all this, my one single piece of advice is to remember that the point of a pitch meeting isn’t to get a term sheet, it’s to get to a second meeting, so keeping them interested and engaged should be your goal in all of your preparation.

By Ryan Floyd

Ryan Floyd is co-founding managing director at Storm Ventures and host of the YouTube channel Ask a VC.

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