By Morgan Killick, Tech Scale-Up Advisor at Business Sheffield
Every different type of business has its own favoured route for presenting itself in the best light. Whereas traditional retailers might spend hours crafting the perfect ‘shop window display’ or product brochure, in the digital era, attention and resources are lavished on perfecting websites or indeed carefully curating an Instagram feed with on-brand imagery. But what if you are aiming to scale-up rapidly through equity investment rather than organic sales growth? Here, the piece d’resistance is surely now the ‘Pitch Deck’.
Pitch Decks came to prominence over 15 years ago and the internet is awash with examples of Pitch Decks from the likes of Uber, Facebook and Air BnB, on the back of which - so the legend goes - 100s of millions of dollars were raised. Of course, in reality those were the early days of investment in high risk tech companies. Pitches to investors were delivered in person only after a months or years of prior conversations. A ‘pitch’ was a moonshot opportunity to personally impress bankers and venture capitalists who could only spare you a few minutes of their time. The ‘deck’ – a series of 10-15 slides with a few words, charts and pictures – existed largely as an aide memoire and something to point to, as you tried to sell yourself and your business model in your most polished tones.
Since then, the Pitch Deck has become the focal point in and of itself and now enjoys an almost mythical status. Why is this? The answer is that the investment landscape has changed significantly in the last 10 years. The number of investors has proliferated steeply - there are now 100’s of specialist tech investors in the UK and £26bn was raised by UK tech companies in 2021 (Source: Dealrorom). At the same time, the number of tech startups has proliferated too, with nearly 20,000 launched in 2020 alone (Source: ONS). Naturally, not all tech companies are raising equity finance, but even if only a small percentage are, it would not be humanly possible for investors to be holding personal pitching sessions for so many applicants.
These days, Pitch Decks are now the starting blocks of an investment journey, not the finishing post. In many cases, they are no longer delivered in person but rather submitted digitally, out-of-the-blue, and read through by ‘sifters’ who will cull a large proportion of them, rather than the anyone from the investment panel. This sort of process is a game-changer and effectively means that you can fall at the first hurdle on the basis of how your few short slides read, without any chance to state your case (or, alternatively, maybe you will do well enough to qualify for the next stage!).
As well as being vital to perfect in order to impress investors, I would add something else: the process of developing a Pitch Deck is in itself a valuable - sometimes crucial - exercise in resolving underlying weaknesses in business models or tensions over strategy. Moreover it can considerably strengthen the way the company sees and sells itself. I have known many cases where the act of crafting a Pitch Deck slide has caused founders to radically change direction, rethink their USPs, or abandon and redraw their financial forecasts. There is just something so decisive and final about committing a handful of sentences or statistics into a Pitch Deck that naturally exposes all the fudges, gaps and uncertainties that can easily be glossed over in the extended narrative of a business plan or indeed buried deep inside a cashflow forecast.
For these reasons, intensive work on the Pitch Deck is often one of the first things I do with a client who is trying to attract investment. Each year I help develop or comment on scores of them and many of the best have gone on to make their raise.
There is plenty of general advice and guidance on Pitch Deck development on the web and places I particularly recommend for information and tips on equity funding (including Pitch Decks) are TechNation (https://technation.io/resources/the-ultimate-guide-to-scaling/), the UK Business Angels Association (https://ukbaa.org.uk/entrepreneurs/) and SeedLegals (https://seedlegals.com/resources/).