We are working on a pitch deck for pre-seed round. I am lucky enough to find an experienced financial analyst on an equity - I was wondering what are the important tenants from financial modeling stand point in the pitch deck which make investor go "wow" in this order -
1) Must to have
2) Nice to have
3) Keep me in appendix.
Thanks a ton, everyone!
Hello again Saquib, I have to admire that you just don't give up.
When you're talking about seed money, it's typically not when you think about having a pitch deck. The time for pitching is later when you have worked out your business. But when you're still struggling to define and validate your product-market fit, when you lack a business plan, in other words seed round and before, you are not ready to pitch anyone.
What makes potential investors say "wow!" are the following:
1) you have done your research and know the real numbers because they have been validated with specific detailed facts and examples that are beyond reproach
2) you have validated your marketing strategy by testing all of your assumptions, determining your product-market fit, and know exactly what it will take to win customers because you've already interacted with and included them before you started product development
3) you have revised your business plan to reflect the things you learned during your discovery process while validating and testing each component of your enterprise, so now you have reduced the risk of investing to an absolute minimum and know what each dollar in is likely to produce in revenue
Those three things are all must-haves.
Nice to haves are examples of what the product will look like.
There should never be an appendix. Anything else, wait for someone to ask for it.
I know this sounds like everything is a must-have, but it's true. If you don't do your homework and prove that you are a low risk for an investor, you might as well never ask. You'll look either irresponsible or foolish and you'll burn the bridge with that potential investor.
From a financial modelling stand point? I've never seen an investor say wow at a financial model and I can't think of anything you could put in there which will have that effect. Investors are impressed by other things which are mainly to do with the insight you've gathered about why your users join and continue to use your app. Since your app is a social network, how many others do each of your users bring in?
That is a really good questions, because I am working on one right now and would love some feedback. Let me know if you want to exchange pitch deck for feedback. That could be helpful.
This is what we are working on!
- Five-year financial projections
- Revenue projections and growth rate
- Show a path to 10x return
- TAM, SAM, SOM and Launch Addressable Market or LAM?
- Cstomer Acquisition Cost (CAC)
These will go int your Investor Presentation -
Check this out as well https://piktochart.com/blog/startup-pitch-decks-what-you-can-learn/