Investment managers or business angels see several pitches every week. Not all of them meet their expectations. But what is really important?
We recently talked to a managing director of a Venture Capital firm about his top 12 topics that need to be covered in every pitch deck and we summarized the findings for you.
His most important hint in advance: The pitch deck is not just a collection of slides that depict a problem and a solution. It is rather a product consisting of a 360 degree view and a x-ray of the idea combined with the visualization of the business plan demonstrating the unique value of the solution and thereby stressing that your business is able to grow enormously during the next years.
- THE PROBLEM
At the very beginning, the problem should be explained in a way that the investors understand and really “feel” the pain of those suffering from the issue. Founders should describe where exactly the need is in society (e.g. incidence of a disease), industry (e.g. manufacturing inefficiencies), technology (e.g. limitations of current technological solutions) or somewhere else that cries out for their solution.
- THE SOLUTION
Founders should explain in words, pictures and graphics how they want to create added value and make their customers happy in future – namely by solving their biggest problem. Available data, scientific results or a prototype should be used to demonstrate that the solution works and it has a high likelihood of success. Founders should include information on IP, if there are any finding on “freedom to operate” or if there is already a patent filed.
- THE BUSINESS MODEL
There are so many different business models – even in Life Sciences – that is why founders should be as precise as possible especially when it comes to the required partnerships and the sales model including distribution channels. It is always possible to encounter problems with the chosen business model, so it is certainly not wrong to have one or two other models in stock. In case founders are in highly regulated life science markets – like e.g. healthcare – a reimbursement strategy should be included.
- THE USP
Founders should point out their unique selling proposition and answer the following questions: What is the biggest advantage of the start-up compared to the others? What makes it so absolutely unique? Are there “hard facts” like patents or is it already market leader? The “magic” thing that distinguishes a start-up and its idea from the others is what makes it special and attractive for investors.
- THE MARKET / THE APPLICATION
Start-ups should concentrate on a relevant market for their solution and remain realistic. Beautiful figures are of course great to look at, but young founders should be aware that exploding market shares and volumes are very rare. So, investors must be clearly shown where the solution will find its place in the market. Founders should be prepared to describe how the market was calculated and which assumptions were used for the market model.
- THE COMPETITION
It is quite possible that other companies already had a similar idea or perhaps have it at this very moment. Therefore, an in-depth analysis of the competitive environment including a comparison with the next-best-alternatives and the limitations of those against the start-ups solution is a must. Founders should also take into account upcoming scientific breakthroughs that might act as a competition to the science the start-up is currently building its solution on (CRISPR / Cas 9 had and still has that potential).
- THE TEAM
This is one of the most important topics in every pitch deck! Why? Not everything will always go according to plan during the start-up journey. With an experienced, strong and diversified team, founders can master all the difficulties of their start-up day and even have fun doing it. Founders can add credibility by introducing an advisory board or consultants.
- THE VISION
All these facts are of course great, but investors want to see how the long-term vision for the company looks like. Does the start-up only want to operate in one market or are there any expansion plans to adjacent markets? Are there any further solutions that can be developed based on the IP or scientific insights the company has? The vision of the start-up can be extremely multi-faceted, it should be optimistic, but not completely unrealistic. It is important for investors to see where founders want to go in the long term.
- THE DEVELOPMENT ROADMAP
Life Science ideas typically take quite some time to be fully developed. Investors know that, so founders should not be shy to share a several years lasting product development roadmap including the regulatory pathway.
- THE FINACIALS
All the finding from the previous topics should be translated into numbers and be considered in the financials section. Ideally, founders share a five-year projection of revenue and costs with a top- and a bottom-case with the relevant assumptions. In case any funds or grants were raised already, the founders should lay out what this money was used to accomplish.
- THE FUNDING REQUIREMENTS
Founders should show what they have achieved so far and where they stand. Of course, it is great if the company already has initial tests that act as a proof of concept. This gives founders a lot of credibility towards the investors. However, the founders want something from investors, so they should be very clear about how much money they need and for what.
- THE SUMMARY / ELEVATOR PITCH
In the end the founders should summarize the pitch deck with an elevator pitch. In an elevator pitch, founders should be able to demonstrate in 30 seconds who they are, what they do, what problem they solve and how, and above all why investors should trust in them. No more, no less. Short and to the point.
In case you want to learn more about how to build the perfect pitch deck for your life science start-up, just get in touch with us and we are happy to dive-deeper into this topic with you.