How to Create a Pitch Deck That Any Investor Will Love
Having a good pitch deck can go a long way when pitching to investors. Many people ask me, 'Please tell me how to make a winning pitch deck!' A pitch deck is essential for starting a fund. So, what are the main factors to consider when creating a pitch deck? Here are some common pitching exercises:
a) Discovery Questions:
Get to Know the Investor; Speak at Their Level
b) Pitch Length:
Less Than 15 Minutes
c) Problems and Solutions:
Simple Layouts I Use
I would like to present the problem and solution immediately, followed by information on the market, management, and nature of the fund. There is no one correct way to do it. However, the correct information must be presented correctly.
When you open a fund, you sell your strategy and your sponsors. What is your investment theme? What are you trying to prove? These are the key points to consider when crafting a good strategy. Dive into things like due diligence, investment criteria, fund decision-making hierarchy, and other details investors need to know. Give them some visual aids. From where does the cash comes, and where does it go? When considering how and where to target your investors, you can decide whether to create a reader or a presentation deck.
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Presentation: Used when presenting to others. minimal text and multiple charts.
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Reader: Used when an individual presentation of the deck is not available.
Don't get lost in BIOS. Just tell investors why your team members are great (show awards or responsibilities with the fund). Finally, we present a case study. How was your last investment or fund? What did you do to get such big returns? People want examples of why you and your team are right. This is how you would probably be able to create a pitch deck that any of your investors would love.
I want to help you raise millions of dollars with these strategies. We are talking about understanding investors. Many of my clients don't know who they are talking to when approaching investors! You need to know who they are and respond to each person you speak to. Are you trying to pitch new or existing investors to your company? "New" means they have never invested in you, and "current" means what you have. New investors don't know you, don't like you, and have no reason to trust you.
Here are some tips for attracting new investors:
a) Do an investigation. Know who they are.
b)Make a good first impression.
Don't set aggressive commissions on your first investment (this happens far too often!).
Investor vs Allocator
Know the difference! Investors use their money, even as allocators make investments in other people's money. So, while allocators require various confirmations and do due diligence before investing in you, investors say yes or no very quickly. Tastes are radically different. For example, a 10-year lockup period discourages investors but looks more attractive to allocators.
Due to the nature of the job, a typical salesperson might call a customer and say, "Are you the decision maker?" You might ask, "What is the process before investing?" or "Is there anyone else who needs approval for this?" Just like investors need to know you before they invest, you need to know them too! Direct your pitch to this person! I know you can raise millions of dollars with this strategy!
I want you to consider your investment strategy in this section. This is the foundation on which the fund is built and what it presents to investors. Let's start!
First - Expert
You can't underestimate how important it is for people to see you as an investment professional. In fact, given the millions of dollars people expect to file in your jurisdiction, this is a logical conclusion. Before you get someone else's, you have to know yours. People keep telling me they want a fund that invests in real estate, but VCs have ruined that, and on top of that, they have amazing new crypto strategies and quit. The truth is that if you want to have many branches in your fund, you will face major obstacles when pitching to investors. I would call BS on its ability to be a legitimate frontrunner in all of these different industries. Honestly, so do you. The more specific and niche the industry you can specialize in, the more successful you will be in fundraising.
Second - Scalability
You need a strategy that can be effectively conceived and executed for $1 million, $10 million, and ultimately $100 million and beyond. Some funds may have a map for success at a small and targeted scale, but things can quickly turn into a nightmare once they start expanding. It can happen with many real estate funds. Let's say every acquired property has a completely different management system. Doing so will cause problems later. This work has the potential to grow. It will take a while to get everything right, but that's okay. Once you're in a place where you're happy with what's in front of you, you're ready to move forward.
Third - Logic
Again, some of these steps may seem pretty obvious, but the result is different. Your fund strategy should make sense in your head and, more importantly, in your investors' heads. You need to be able to communicate all aspects of your fund in a story that allows people to understand your vision. Everything you include in your pitch deck or fund setup should flow and integrate seamlessly in the desired direction. The moment you make a mistake and have data or elements in a structure that doesn't make sense, you will reject anyone open to working with you. To develop a perfect strategy, you should use the "why, what", "how", "who," and "when" questions.
Fourth - Flexibility
That may seem like a contradiction to point 2, but hear me out. If your initial attack plans start to falter due to uncontrollable market forces, you may need to change course. When the day comes, you are faced with two options: Hold or Pivot. I'm not here to say one is more beneficial than the other, as it all depends on the situation you're dealing with. But what I'm saying is that you need to be flexible about it. If we can make the necessary fixes and changes during difficult times, we can save the ultimate goal: your neck and our investors’ money. On the one hand, it may be your failure, but this is where you should come in as an expert. So, do it like a gymnast and maintain that flexibility! Remember, it's a world where things are about to take a turn for the worst.