The global startup ecosystem is estimated to have created over $2.8 trillion in value between 2016 and 2018; this number is only going to keep increasing. According to research by Startup Genome, the success of a startup is heavily dependent on the ecosystem supporting it. A catalyst in any startup ecosystem is pitch battles. Battles bring visibility, expert feedback, validation, and access to funding to startup ventures.
We wanted to share some tips and advice with future battle contestants that may help you with your pitches!
Before you start on your pitch, get into the right mindset:
- Pitch battles are not the same as pitching to investors. While the information may be very similar, in pitch battles’ judges are evaluating your potential and capacity for scaling.
- Focus on word counts over rehearsal timings. An average individual speaks at a comfortable 120-words per minute. Therefore, in a 3-minute pitch, you have 360 words overall. Distribute these words wisely across your slides and do not leave room for impromptu or off-the-cuff narratives.
Now that you have the right mindset, we have outlined the ten must-have slides in any battle deck and how you should approach them.
The cover should capture the attention of your audience and create curiosity towards your venture/idea by telling the judges why your customers will care about your product/service.
- Use an image that represents the space you are playing in.
- Have your branding prominently placed.
- Include a short phrase addressing the frustration your business solves for the target market.
- Include any awards or recognitions received here to validate your venture
Note: Most businesses can explain what problem they are solving for their customers. However, when we articulate the frustrations this problem can cause, we exhibit greater customer empathy and awareness.
2. Problem / Opportunity
This slide intends to make a case for why your business needs to exist. We need to prove there is a big enough pain point in the market to warrant your solution/service.
- Quantify the pain points by placing a dollar value on every reason your customers will opt to use your product/service.
- Prioritise quantifiable pain points over qualitative points.
- Calculate the total savings/earnings your market can make by opting for your product/service.
Having established there is a financially-viable market for your business, you can now introduce your product/service.
- Keep it simple. Visually presenting your solution helps to explain your business faster and clearly.
- Focus on the functionality that will bring in revenue.
- Do not get carried away with your brilliance.
4. USP/Magic Sauce
The USP or magic sauce refers to your venture’s unfair advantage over the competition.
- Study your business objectively.
- Identify any aspect of your business that can be an edge over the competition.
- Keep the logic for this simple and straightforward.
- Explain why these advantages cannot easily be copied or mimicked.
5. Revenue Model
Now that you have set up the problem, opportunity, solution, and why it will succeed, focus on how your venture will make money.
- Mention all possible revenue streams for your venture, even if a revenue line may be several years down the road.
- Keep the revenue lines clear and simple.
- Know the price you want to charge and the margins you hope to make.
- Explain the roll-out plan for each line over the years.
6. Go to Market / Traction
Once the judges know the sources of income, you need to convince them of the market size, what portion you will capture, and how you intend to do that.
Guide to market sizing
- Total Addressable Market (TAM) – the total number of potential customers/users for your product/service.
- Serviceable Addressable Market (SAM) – is the segment of this audience that you will see a direct need for the product/service.
- Share of Market (SOM) – the target segment of the serviceable market.
Do not fall into the % trap! Telling the judges that capturing just a small % of the market will result in a sizeable revenue shows a lack of focus and strategic approach.
- Think big! When defining your TAM look at all possible user groups.
- Logically drill down to the Share of Market (SOM) and make sure the SOM is large enough to achieve a positive cashflow.
- Clearly explain how you intend to reach and capture the SOM.
- Present any traction you have gained so far preferably month on month growth.
On this slide, you should indicate any competitors in your space. Competitors can be any product/service that accomplishes a similar end-result for the customer.
Telling judges that you do not have competition would be naive and indicate you lack market insight.
- List a few competitors who can be a threat to your business.
- Explain why your product/service trumps theirs and will be able to capture market share from them.
- Highlight any potential exits to a larger competitor.
Having excited the judges with your business acumen, you need to convince the judges that your team can deliver on everything promised.
- Include key team members and their profiles.
- Clearly explain what each person brings to the table to help the business succeed.
- Highlight responsibilities over designations.
Having explained the why, what, and how of your business showcase the potential financial rewards of this venture.
- Present the 5-year financial forecast post-funding.
- Indicate when will become cashflow positive, earlier the better!
- Ideally, show the judges that your 5-year cumulative profit can return part of the investment raised.
10. Use of Funds
The final slide should indicate the amount you are raising, the equity offered, and the utilization of funds.
When coming up with the amount to be raised, focus on the funds needed to sustain growth rather than the perceived value of the business. If the cumulative forecast profit can deliver a 1x – 5x return to the investor, it will reassure the judges the investment would be recoverable. An exit will give the investors a 5x – 10x return.
The utilization of funds should show the main expense item for the funds. Try to channel funds to revenue-generating activities instead of operational activities. You need to show the judges you are committed to growth rather than cash flow.
These are the ten slides that help you convince a panel of judges that you have the best possible venture in the battle and can grow exponentially.
Download the Show & Tell Pitch Script worksheet to help you stick to time and get your message across effectively.