Financial Model as a Part of Investment Pitch Deck
Investment Pitch deck or pitch presentation is the first time a potential investor will learn about your business idea. Therefore, its quality can determine whether you will get funds or not. So how should you pitch to succeed?
Motivating the investors with your financial model
Even if you pitch with passion, show the big picture, explain the why, make an outstanding summary, you can still fail to motivate your investors. Those people are driven by the challenge to find a profitable business to invest in. This is the moment when a high-quality financial model rocks. Show them the numbers. Explain the revenue generation process, the estimated payback period of investment and financial risks.
Demonstrate that you know your goals and describe what you need to achieve them. Paint the most complete picture you can, not only with words but also through graphs and numbers. There are many great startups that were rejected because the potential investors did not have a good understanding of the financial side of the business idea. So show them how it works.
The 10 must-have slides in Investment Pitch Deck
When pitching to potential investors, you are expected to present a set of slides, known as a deck. Good advice to those preparing a deck is to stay short and focused. Guy Kawasaki in his famous book “The Art of the Start” argues that an outstanding investment pitch deck should consist of 10 slides and has to be 20 minutes long. Start with a title slide, followed by the problem, the solution you came up with, and the respective business model.
Then present your management team, the technology, your target market, potential competitors, finances, and close with the current status. In terms of finances, you will be expected to demonstrate mid-term and long-term forecasts as well as your financial model. You can have a backup slide with the Excel spreadsheet to help you answer the questions. The investors will be interested in the key metrics such as profit and costs, customers, market penetration rates, etc.
Avoid presenting only static PDF files. Investors might ask you to modify the situation and play around the numbers. Financial modeling in Excel will be the best option. The metrics that you have to include vary for different kinds of business. Thus, it is important to develop your own financial model that will be relevant for your project. In such a way, you will show the investors that you went beyond just having a good idea. Relevant numbers will persuade people much better than words and assumptions.
The features of a winning business
The above can demonstrate that your idea has everything to become a profitable venture. First of all, you want to explain how it adds value to customers and solves a certain problem within a promising market. Further, you should stress your competitive advantage. The most important thing is to show the metrics.
Prove that the market you target has the potential for good margins. If you have a great idea and plan your own investment pitch, don’t hesitate to contact our Finmodelslab team. We will gladly help you learn more about this topic and create a high-quality financial model for your presentation.