Godling Studio is a leading brand & storytelling studio, helping founders raise ~$2B by sharing their stories in the best light.
For fund managers and founders alike, pitch decks still live at the heart of a successful or not-so-successful fundraise. A strong pitch deck has the power to give life—to take the vision that you, as a founder, have of the world when your company is successful and communicate it to others. It is the wedge that allows you to enter conversations and the framework from which investors will understand your company.
This is not an easy task. Investors get pitched hundreds, if not thousands, of times each year. So the real question to ask is: How do I stand out?
After working with dozens of startups and emerging funds on pitch decks that have helped raise approximately $2 billion in capital, we’ve developed frameworks to tell stories that can help you raise capital successfully, reduce your fundraising timelines and even increase your valuation.
In literature, all good stories or plots are broken down into five core components:
• Introduction: presents the conflict, characters and settings.
• Rising Action: a character’s attempt to solve a problem but fails.
• Climax: turning point—the point of the greatest suspense or action.
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• Falling Action: events that deflate the plot’s tension.
• Resolution: the end, where the conflicts or problems are solved.
A pitch deck is similar:
• Act I of your deck is where you state your case, consisting of your introduction and rising action.
• Act II is where you highlight your offering and de-risk, consisting of the climax and falling action.
• Act III is where you show the trajectory and pull investors in, resolving with a happy ending.
Let’s go one click deeper:
Act I
The key to stating your case is building tension. Tension is what drives interest because tension is opportunity. Investors want to see a problem that a lot of people care about and that no one has solved. When all these stars align, you get a massive opportunity.
• Current State and Problem: Start off by describing how the world works today. What is broken in the market?
• Relevance: Next, state why this is important. How is this problem negatively impacting our world? Why should investors care now?
• Market Opportunity: Then, identify what is stopping improvements from being made. Is it a technological inhibitor? Are incumbents unable to solve this problem or are they exacerbating it? For LP (limited partner) decks, what is the potential untackled opportunity for the fund?
If you do this well, investors should be fully bought into the problem and at the edge of their seats waiting to hear the solution. This is tension building.
Act II
Now, as we reach the peak of tension, we can begin to reveal our cards one at a time. We’ve empowered the investors we’re pitching with industry expertise on the market, problem and opportunity in Act I—information they will leverage to evaluate whether your solution, product and/or company will sufficiently pass their investment criteria.
In Act II, we address the most important questions about the company, including:
• Company: What is your company’s one-liner? How do you want an investor to explain your company to their team or LPs?
• Product and Thesis: What is the product or service your company is selling? For LP decks, what is the focus or thesis of your fund?
• Value Proposition: What are the strengths of your company? For LP decks, how does your fund succeed in sourcing, picking, winning and supporting founders?
• Competitive Positioning: Why can’t other competitors do the same thing? What are your moats?
• Business Model: How does your product and business model work? What is the flywheel?
• Special Acts: Good companies have at least one core advantage that gives them a big leg up over the competition; it’s important to find and lean into yours.
Each answer peels back the layers of the company and de-risks or releases the tension you built up from Act I. While these questions and answers are logical ones, the goal is to evoke emotional reactions filled with curiosity, understanding and excitement—almost as if investors knew this was the answer all along.
Act III
When we think of the last act, we think of trajectory and resolution. While resolution might feel like a slowing down and closing of gaps, trajectory feels new and exciting. This act needs to strike a fine balance between the two—showing investors that there’s high growth potential backed by a vetted strategy.
• Growth Strategy and Proof Points: Describing your growth strategy allows investors to take a peek into what the journey to scale looks like. For LP decks, what is your investment strategy? Do you have a track record of success to make investors believe you can maximize returns?
• Financial Projections and Market Sizing: To put the growth strategy into context, financial projections or market sizing helps investors place targets and resurface the actionable opportunity from Act I.
• Team: Investors need to have confidence in the people they are investing in and their ability to grow the company. For emerging funds, this “Team” slide is beneficial to have upfront in the deck.
• Advisors: Listing your strategic advisors and existing investors that will guide your company to scale and facilitate industry connections can increase your reputation and provide comfort to prospective investors.
• The Ask: Investors might want to know what you are looking to raise (i.e., Seed, Series A+) and what the capital would be used for at a high level. For emerging funds, what are the fund terms?
• ‘Recrescendo’: Inspire your investors with a conclusion on the big vision and instill upon them the verbiage to explain and pitch your company to their fellow investors.
The best pitch decks allow investors to empathize with you and see the world from where you stand. Your problems, opportunity and success become theirs. If you execute these elements correctly, you’ll have brought investors along on an action-packed, suspense-filled journey, where they are eager to see behind the scenes.
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Author: Albert Dong, Forbes Councils Member