Hi everybody, I’m John Smith, General Partner with Innosphere Ventures leading the B2B software practice. I have over 30 years’ experience founding and building software businesses, taking them from scratch, to over 100 million dollars in annual revenue. Now I’m a venture capitalist ready to guide you on your journey helping you build your successful B2B SaaS business.
Today I’ll be talking to you about how to build a VC pitch deck for an early-stage SaaS business. I created a pitch deck template that you can download from our website at innospherefund.com
Now, your pitch deck is one of hundreds of VC will be reviewing, so your deck must be extremely clear and cover all the critical points they’re looking for to decide to take a meeting to learn more about you. They’re spending a second or two on each slide, so you need to get your message across fast. Keep plenty of white space and use a large font size. The number of slides needs to be kept to a minimum while providing all the information they want to see. The pitch deck needs to make sense objectively on the financial reasons to invest and be emotionally compelling at the same time. The pitch should be visually appealing and deliver the expected data points. If you don’t cover all the points they need, the VC will get frustrated and move on to the next pitch deck.
I created this pitch deck template using a fictitious company and people to provide an example within the template of how VCs want to be pitched to. This pitch deck template is designed for SaaS companies raising any type of early-stage financing. This template covers all the points you need. Pictures bring the pitch to life while diagrams, graphs and charts convey a lot of information easily. The subtitles should tell the whole story. If someone only reads the subtitles, they should understand your pitch. The slides should explain themselves enabling you to tell the story. You don’t need to pitch all the slides during your meeting with the VC as they will have reviewed them in advance. VCs expect a certain flow to the pitch deck in an order that tells the story the way they want to hear it. The title slide needs the company name, your tagline or slogan, your name and title. That’s it, nothing more. So, for the example, I’m using a fictitious company named Agency Genius with the tagline of “Grow your business, Simplify your life”. The fictitious CEO is Gemma Grate.
Now, the company purpose slide is a very important slide and one that is usually left out of pitch decks. The company purpose is a level set slide, so the VC understands right away what sector you’re in and your business model. So, state the company purpose in the subtitle, use a picture and words explaining what your product does, how it does it and who it does it for. So in the example, we communicate what the product does in the subtitle with “manage insurance agencies with a single SaaS platform”, how it does it with the Insuretech SaaS platform diagram, and who it does it for with a picture of our buyer persona labeled as Independent Insurance Agent – and she looks really happy.
Now the problem slide. So, state the problem summary in the subtitle, use a picture and words to explain the exact problem your buyer persona is experiencing and the business impact of the pain point. If there isn’t a business impact, then you won’t have a compelling reason for people to pay to solve it. Using pictures of your buyer personas in the first few slides gives the VC a good understanding of who you’re selling to. So, in the example, the problem is stated in the subtitle, “Antiquated tools that don’t work together”, we describe the exact problem we’re solving along with the business impact, “Frustration from a lack of an integrated tool set resulting in lost revenue and operational inefficiency”. We show a picture of our independent insurance agent buyer persona, he looks pretty frustrated.
Next up the solution slide. So, state the solution to the problem in the subtitle. VCs want to see the product so link in a short, less than two-minute video demonstration of the product. If you can’t do that then provide a screenshot or two. Now for the demo, select a single user path through the product that solves the exact customer problem you stated on the problem slide.
Emphasize easy to buy, on board, use, and support in the voice over during the demo. This is a chance to show off your focus on delivering an excellent user experience. On the slide, list your measurable benefits that you can back up later with customer case studies that address the business impacts of the problem. So, in the example we state the solution to the problem in the subtitle – “One system to manage the entire customer life cycle”. We provide a link to a short product demo and we provide a list of the measurable benefits of the solution.
All right next up, is the market slide. So you want to state the serviceable addressable market or SAM in the subtitle. Now VCs are looking for big returns, so you need to find an opportunity that results in a 1 billion dollar plus serviceable addressable market that is growing. Calculate the addressable market bottoms up not top down. Calculate your addressable market by multiplying your annual average contract value times the number of buyers in your geography to calculate your TAM. Next, find the subset of buyers that are a match for your buyer personas and multiply by your annual average contract value. This becomes your serviceable addressable market, and then finally calculate your serviceable obtainable market by taking a reasonable fraction of your SAM given the competitive landscape. Now, you need a SOM that’s big enough to build a 100-million-dollar business in annual revenue. You could potentially show adjacent market opportunities in the SAM and cross sell opportunities in the SOM with dotted line circles showing expansion. Give numbers demonstrating the bottoms up calculation. Once again show a picture of your smiling target buyer matching your buyer persona with the three market circles. This brings it to life so we can see whose problem you’re solving. Now in the example we show our buyer persona selling an insurance policy to her customer and we show the numbers explaining how we calculated the TAM the SAM and the SOM.
All right next slide, why now? you want to show why now is the best time for your startup given what’s going on in the market. So, state the market inflection point in the subtitle, describe the key trends leading to this point in time. In the example we state the inflection point in the subtitle – “Demand for transparency combined with new technology”, we list the key industry drivers happening now along with the digital transformation shift occurring and the underlying technology advancements that enable us to build a solution to the problem.
The competition slide. You want to state your two key differentiators in the subtitle. For the chart, select two dimensions that are the sustainable differentiators the market really cares about. Now here’s a hint, Easy will usually be one of them. Place yourself up into the right on the diagram with the main competitors positioned accordingly. List your secret sauce and describe the barriers to entry that you’ve created for your competitors. Don’t use a 2×2 table of features and competitors with ticked checkboxes because features are not a sustainable differentiator. Now, in the example, we use easy and completeness as the two sustainable differentiators and then we place ourselves and the competition on the slide accordingly, we also plainly list our secret sauce.
All right next up is the revenue model. So, state your pricing model in the subtitle, show a screenshot of your product structure and pricing with the tiers, the features in each tier, the price points, monthly price, annual price, discounts, etc. Now if your pricing isn’t on your website, then describe your packaging and pricing clearly as I’ve done on this slide. Explain how the pricing model is aligned with your buyer personas so that each buyer can easily find which option is right for them.
All right next up, the go-to-market slide. State the key element of the go-to-market strategy in the subtitle. On the slide, describe how you are going to market, creating your messaging, your marketing strategy, your sales team, channel team, or cloud marketplace. As you’re presenting, verbally describe how you have already established the product-market-fit and the go-to-market fit. Show your current customer acquisition, your LTV to CAC ratio, and churn metrics to demonstrate how well your go-to-market engine is performing and the improvements that are still needed. So, in the example, we show how we created our messaging, we describe our marketing strategy that we’re using SDRs to provide qualified leads to the remote sales team, and this is all on top of the underlying product led growth strategy which has customer success involved in the sales process. We list our current metric values showing how well our go-to-market engine is performing currently and where we have room for improvement.
The team slide. All right now, this is one of the most important slides. You need to communicate quickly that you are the right team, with the right education and experience to achieve your mission. Just put the key members of the leadership team on the slide, don’t include too many people here. Now for each team member, have their picture of their name and their title. For education, have a picture of the college logo and degree. For experience, have a picture of the company logo and job title. Describe your founding experience and any experience working together as a team. Discuss ability and commitment, the team has the grit and perseverance to see it through to a successful exit. In the example we list our CEO, CTO, and CRO making it clear they have worked together in the past as the founding team for Limeade and had a successful exit.
The financial slide. Now, this slide needs to convey your traction and your forward-looking plans so state your traction in the subtitle. Show a high-level financial model summary in the context of where you are on the journey with actuals for the previous year plus a three-year projection. You will address the five-year aspirational goal later in the vision slide.
Showing revenue, COGS, gross profit, operating expenses, net income, customers, and headcount is the right level of detail for the pitch deck. This communicates that you have built a proper financial model that can be viewed later. The information on this slide gives the VC what they need now. Show your funding history, the current round, and the expected next round. State when net income will break even and what is your last expected round of financing. So, in the example we state our traction in the subtitle – “Achieved $25,000 of MRR and 50 active customers”. We show our actual performance for last year and we show our three-year financial plan. We also show our customer count ramp and headcount ramp. Finally, we show our funding history, our current fund raise of a 1.5 million dollar seed round and our future planned fundraise of a 3 million dollar series a round.
The investment opportunity. Now too many people leave this out of their pitch decks. VCs don’t know if they’re a fit for you if you don’t tell them about the investment opportunity, so state the specific opportunity for the VC in the subtitle. Describe the financing terms including the pre-money valuation and the use of funds in the right amount of detail. So, in the example we state the investment opportunity clearly in the subtitle – “Become the lead investor in a 1.5-million-dollar seed round”. We list the financing terms including the pre-money valuation and we list the use of funds.
Finally, the vision slide. Now you want to remind the audience of your tagline or slogan in the subtitle. Your vision needs to be a measurable statement of what the business will look like in five years. Combine the vision with your contact information on the last slide, so when you’re in a meeting with the VC this will be the slide that remains up during the discussion time providing a constant reminder of what you can become and how to contact you. Now, you need to be able to deliver the presentation under 20 minutes. Sometimes you’ll only have 5 minutes, so assume the VC has reviewed your presentation in advance of the meeting and you don’t need to walk through every slide, but you want to use storytelling to win over investors and get that funding.
Okay so there you have it, an overview of what you need to do to build a compelling VC pitch deck for a SaaS business and give yourself the best chance of getting a meeting. Go to the innospherefund.com website and download the Venture Capital Pitch Deck Template for a SaaS Business presentation to get started building a compelling pitch deck for your business.
Once you’ve established a product market fit for your business and are ready for seed funding, reach out to Innosphere Ventures and let’s see if we can be your partner helping guide you along your journey to success!