If you are raising your first funding round, you likely need a pitch deck for angel investors to illustrate your product or service. The pitch deck is possibly never as important as it is for angel investors, which is often when your business only has an idea or minimal users, which means that their funding decision is based more on your team, value proposition, and business model as communicated in your pitch deck.
When preparing an angel investor pitch deck, keep in mind that most investors will give your business little time and attention before seriously considering you for funding. Most angels receive at least an investment pitch daily, but only may make a few investments per year. Therefore, you can image how little time they spend on each deck before their interest is peaked. The pitch, therefore, should be very concise and straightforward as to avoid confusing investors and appearing overly complicated. In general, there are three aspects to an angel investor pitch deck including the value proposition, business model, and financial projections.
The value proposition for an angel investor pitch deck generally is very slim and is only around three slides maximum. It explains your business model and what exactly the problem your Startup is solving. If someone if your market has already attempted to such a problem, then it addresses exactly how you are taking a more optimal approach than the existing competitors. In general, angel investor pitch decks highlight and IP you have, special connections, or team members that the competitors cannot replicate. Investors will look for a ‘secret sauce’ that answers the question, "why can’t or won’t your competitor do this or how will you stop someone from copying and outperforming you?’ Do show that it's more than just an idea.
The business model portion of an angel investor pitch deck typically attempts to describe the business model with as little words as possible. The business model is how the business generates a profit by delivering products or services to customers. The business model of Uber is that it connects drivers and riders via its mobile app with its technology serving as a brokerage for both members. This can also include pricing and membership options and should be as simple as possible to communicate the business and structure with as few words as possible. The business model should not be described in a complex way, but if you have a scientific or engineering related product, you can include schematics and the details upon request.
The financial projections for an angel round pitch deck are usually just that – projections and assumptions that will be given different weight by different investors. Some angel investors seek to understand the underlying assumptions used to determine the projections such as customer acquisition cost, retention rate, and lifetime value. Others simply disregard the forecasts entirely and focus more on how much money you will be spending and what it is being used for. In both cases, it is better to be safe and prove them an approximate estimate on the use of funds, which is usually either product development or early stage marketing for angel round companies and the approximate number of customers based on your marketing plan. Nothing increases investor confidence more than being able to actually see how your project will actually give benefit them.
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