Congratulations on being ready to raise a Series A round! At this point, you’ve proven your concept, developed your product, found your initial set of customers, and have been executing on your vision for some time. Your company is ready to grow, and it’s time to find the right group of partners to help you get to the next level.
As you prepare to raise capital, it’s important to prepare the right materials in order to make the process as smooth and effective as possible. A successful fundraising round always starts with a robust yet concise pitch deck. In this article, we provide you with a high-level overview of the function of an A-Round pitch deck with its key components, strategies to determine if the pitch deck is working, and suggestions on how Exbo Group can help with the process.
We’ve also included a downloadable sample A-Round pitch deck for your reference in case you’d like to see how we recommend formatting the document in order to achieve the best results for your business.
How is a Series A Pitch Deck Different than a Seed Pitch Deck?
First, a Seed round and a Series A round cannot be handled in the same manner. In a Seed round, your pitch deck is mostly used to showcase a product, vision, and business model, even if many of the details haven’t yet been fully developed. In most cases with seed round investments, investors are betting on the team’s ability to execute on their business plan, so the pitch deck should focus on showcasing the team’s ability to crystalize an idea into a cohesive product or business.
For a Series A pitch and potential raise, it’s crucial that the entrepreneurs showcase their concrete business results and their plan for growth. Investors expect your deck to demonstrate that you’ve achieved product-market fit, gained significant traction, and have concrete plans about scaling the business. At this stage, investors are interested in seeing concrete data, metrics, and tangible results, which are typically unrealistic to showcase as part of an earlier Seed round.
What is the Purpose of a Series A Pitch Deck?
Ultimately, investors getting involved at this point in the company’s life cycle will require a substantial piece of ownership in the company. A Series A pitch deck needs to assure potential investors that their money is going somewhere safe, reliable, and tangible. This should be looked at as a calculated risk, but one that has a massive upside potential.
The Series A pitch aims to capture attention in the first five minutes of a presentation, and allows an entrepreneur to go into great detail once specific questions are raised. Early on in the pitch, an investor needs to understand the narrative of the business, and why it is worth a further look. A pitch deck serves as an organized way to guide investors through an overview of your business model and highlight the opportunities that lie ahead.
What Should be Included in the Pitch Deck?
A pitch deck should always be customized to fit the needs of your business. At the very minimum, we suggest that all A-Round pitch decks include the following slides:
Business Challenge (Problem)
Describe the problem your product or service is solving. Try using a story or anecdote as an example that showcases how your customers encounter this issue in their daily lives. Explain the current challenge in a relatable way that will enable an investor to better understand the need for your solution.
Now that you have laid out the underlying problem, what is your team’s innovative idea to solve it? Even if your team’s product is technical and complex, invent a simple way to describe it so that someone with little or no context can understand your business easily. This is also the point where an investor needs to clearly understand how your business will drive future value. At the end of your presentation, you and your team can focus on going into further detail on the product if necessary.
Opportunity (Market Size)
This slide allows you to explain your target audience including the number of customers you reasonably expect to reach with your business. A good slide explains not only the size of the market, but also how you intend to capture a large enough slice of the pie. In describing the market, be sure the size of your market is reasonable. A $50 billion market does not guarantee your company’s success. Demonstrating a good understanding of a reachable market will strengthen an investor’s impression of your understanding of your business.
The traction slide sets out to prove your business has validation in the market. This is the time to showcase key metrics such as revenue, users, and growth over time. If your numbers are still relatively low, highlighting percentage growth year-over-year or month-over-month can be an effective way to showcase the company’s future potential. Once you decide on the metrics to include, pick a slide headline that will grab the audience’s attention. For example, instead of naming the slide “Traction,” try “180% Revenue Growth YoY and 11,000 users.”
Often overlooked merely as a formality, introducing the team is a critical part of the pitch deck. This is a key opportunity to show investors that your team has the credentials and expertise to scale the business. A strong introduction to the team will include each member’s position, accolades, and relevant experience from previous roles.
There are bound to be other companies who are working in the same market as you, so it’s crucial to showcase what makes your business stand out from the rest. An effective way to demonstrate an understanding of your company’s place in the market is via the “magic quadrant model.” This graph shows how the company compares to its competitors on two critical metrics that are plotted on an x and y axis. We’ve included an example of the magic quadrant model in the sample downloadable A-Round pitch deck for your reference.
Investor Summary (Who Else)
An investor slide should provide a high-level overview of the information included on your cap table. We recommend an overview of the current investors (and advisors), the amount raised to date, a showcase of the lead investor, and any terms set by that investor for the round.
Use of Proceeds (Future Plans)
A good slide includes financial information on how your team plans to use the capital raised. For example, investors should be able to understand where the investment will go and roughly how much you expect to spend on developing each of your departments. This slide should also paint a picture of what you plan to achieve over the next 12-18 months after the infusion of cash and how long you expect the runway to last after closing the round.
How Should the Pitch Deck Be Utilized
A pitch deck doesn’t only have to be used during an investor presentation. It can also be leveraged for recruiting advisors, finding new team members, and establishing credibility with potential customers. Remember that even the best pitch decks don’t pop without a strong team presenting them. We always recommend showcasing your pitch deck in a meeting (online or in-person) rather than sending it along to be viewed as a stand-alone document.
Additionally, an effective deck is one that is constantly updated to meet the present and future circumstances of the company. It is important that the data presented reflects operations at least through the current year, if not the current month.
Is Your Deck Working?
It is crucial to ensure that your pitch deck is thorough and is able to convey the story of your business before reaching out to potential investors. We always recommend asking for guidance from your network of trusted advisors and mentors that have experience in your industry, with your business, or with fundraising. In fact, some of the most effective pitch deck reviewers are entrepreneurs that have gone through this process before and are willing to share constructive feedback that will help you improve future versions of the deck. Most importantly, the advice should be tailored to your business—your advisors should understand your vision and should be able to provide specific, unfiltered feedback about more effective ways to showcase your company and future plans.
Additionally, we recommend comparing your fundraising process to a B2B sales process. Are you receiving immediate indications of interest from cold and warm prospective investors? If so, what percentage of all those solicited are interested in sitting down with you to review the deck? Do the investor meetings yield lots of questions? Are the investors interested in following up or introducing you to portfolio companies and advisors in their network? These are some basic metrics you can use to try an analyze if your pitch deck is hitting the mark.
How Do I Know If My Pitch Deck is Ready to be Presented?
A trusted team like Exbo Group can help you build and refine your Series A pitch deck. Our strategy is to be present, professional, lean, and design-focused, which is what we believe leads to the best outcomes for our clients. We understand both sides of the investment equation, which enables us to create the most value for entrepreneurs.
Exbo Group offers entrepreneurs and their teams a free consultation on their Series A pitch deck. Our team of experts is comprised of entrepreneurs, consultants, investors, and analysts that have sat on both sides of the table. We put our many years of diverse experience to work in order to help our clients make the right decisions for their businesses. We have the capability and resources to ramp up quickly, so please don’t hesitate to reach out in order to learn more about our services and how we can help make the fundraising pursuit more easy and effective than ever before.