I had a couple recent conversations with entrepreneurs discussing how to best show early revenue in a pitch deck. Here were a few of the topics we discussed:

Address your revenue

When a pitch deck does not discuss revenue, an investor will assume you don’t have any. If you don’t have revenue that is okay, you can still show traction pre-revenue. If you do have revenue, be sure to mention how many customers, what price point, etc. Also be careful when showing slides on pricing/business model that it ties to what you have already experienced to-date. Balance and clarify real versus theoretical to avoid some red flags in your pitch deck.

Mis-stating key metrics

I sometimes see pitch decks that list a number for ARR (Annual Recurring Revenue). Unfortunately, that revenue figure is sometimes not annual, not recurring, or cumulative over the lifetime of the business. In those scenarios, the entrepreneur loses credibility with the investor. I also sometimes see LTV (lifetime value) calculations for a business that just started and has only had customers for a month or so. To truly know LTV, you need customers over a longer time horizon to better understand upsells and churn.

Describe the customer story

For an early stage company, I really try to understand how they work with customers. Where do you find them? How do you get them through the sales funnel? What message/value proposition resonates? How do they get ROI? What do they love/want to see improved about the product? This all brings the customer story to life to figure out how repeatable the process is and how deep is the customer understanding that is required before you really start scaling up. You are also looking for consistency across customers in terms of type, problem to solve, value proposition, etc.

Really understanding both the quantitative and qualitative data from your early customers not only helps you as the founder see the best path forward, it also helps investors better understand where the business could go.