Winning Pitch Decks: Navigating Red Flags, Inspiring Investors, and Unleashing Early-Stage Potential

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Entrepreneurs usually create pitch decks to send to investors. Most pitch decks just need to get you through a filtering gate; getting an investment comes after that. However, there are some red flags in pitch decks that can make it hard to get past a filter. Here are a few of the common ones I see and how to overcome them.

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What do you do

Sometimes I read through a pitch deck and it is still unclear what the company does or what they have actually done so far. Be careful targeting the wrong investor (i.e. a hardware company targeting a software investor). Make sure you tell a good story and target investors who will understand that story (especially if industry/tech focused). You can have 50 slides and still not tell a good story, or can have 5 slides and tell an amazing story. Side note - do not have 50 slides.

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No slides on traction

If you have revenue, you can show statistics on customers, contract sizes, unit economics, testimonials, etc. Even if you are pre-revenue, you can still show statistics on the number of customer discovery interviews, key learnings, signups, etc. Don’t just ignore traction.

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Overstated macro market size with % of market

I sometimes see market sizing that overstates a macro market and applies it to the specific product. As an example, the deck would show that US Healthcare spending is over $4T, and if they just capture 0.1% of that it would be a $4B business. Make sure to bring down the macro market size to a relevant subset you can target, and spend more time showing why/how you will get customers vs. just a theoretical what if we attained X% of the market.

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Competitive analysis via feature/check chart

It is important to address competition - claiming there are no competitors is not the right answer. But I often see a matrix chart^A with competitors on one axis and features on the other.

Then there are checks and Xs in each box (naturally the startup is all checks and the competitors often have many Xs). The problem with this chart is it focuses on features vs. the strategy of where to play and how to win.

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I much prefer a two dimensional chart^B(i.e. SMB/Enterprise and Manual/Automated) on dimensions that matter to competitive positioning - and from there show how you view the market and position differently.

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Specific smaller exit scenario and acquirers

Be careful saying your goal is to exit for a number (i.e. $50M) and to specific acquirers. While somewhat relevant, if you aim too low and focus too much on getting acquired, it is hard to prove to potential investors you can build a company and make it big enough for them to care about (i.e. could return their fund). We don’t care about exit strategy in pitch decks for early stage companies (just build a great business and there will be options), although I know some investors who do like to think about specific exit strategies.

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More advisors than customers

In order to impress investors, some team slides show lots of people. It could be a team of ten (of which 9 are part-time). It could be a list of 10-20 “advisors.” Remember, in the early stage investors are more focused on the founders. Be sure that anyone on the team slide is fully committed to the business and is making an impact.

For an early stage entrepreneur, you want to communicate a clear, must-have problem, a compelling team/reason to solve that problem, some key early learnings that show authentic demand, and the belief this could be a massive business if you get it right. If you have that, you can likely move to the next step in the funding process and start preparing for an investor pitch.