[BFG Secrets] The optimal fundraising pitch deck to successfully raise a pre-seed or seed round - an analysis of over 500 pitch decks
Funding is an integral part of launching your own venture, so we have produced this guide to provide an overview of the factors to consider when constructing your (pre-) seed fundraising pitch deck. While it may seem like time spent on the pitch deck is time away from operational tasks, it is an investment that will benefit you in the long run. A well-crafted pitch deck articulates your business model, value-added, and vision effectively and can save time by being circulated easily. Nevertheless, there are still many misconceptions about pitch decks, and we seek to dispel some of these here. — Author: Elias Mendel, Max Zheng
Who is this guide made for?
Before delving into the matter, we want to clarify that this guide is targeting founders looking to raise funds in the pre-seed and seed stage, not any later. It is important to stress this, as each funding stage comes with its own demands. For example, pre-seed and seed focus on establishing and defining the product market fit and validating the idea, whereas later raises are more about scaling, revenue generation, and market penetration.
Figure 1: A brief overview of the different funding stages. For more details, check out this article.
Let us begin by noting the distinction between a public pitch deck and a fundraising pitch deck. While a public pitch deck is designed to attract a broad audience, a fundraising deck is explicitly tailored to investors. A public pitch deck should be high-level and easy to understand. In contrast, a fundraising deck should be more detailed and include financial projections and a thorough business model exploration. Lastly, sales decks are aimed at buyers, sellers, partners, and other industry stakeholders, and the content should be tailored to this audience. Now that these distinctions have been established let us take a look at the components of an investor fundraising pitch deck.
Section 1: Executive Summary
Provide a summary of your deck’s key points. If a potential investor could only look at one single slide, it would be this one.
Section 2: VisionIdeally, you can capture your vision in very few words - a catchy slogan. For example, if you are a crypto payment provider enabling fast and cheap remittances for enterprises and individuals, you could have a vision like “Making fast and cheap cross-border payments with stablecoins.”
Section 3: Problem
In this section, it is best practice to succinctly explain the problem you are attempting to solve for your customer. Aim to clearly state no more than three issues in a way that resonates with the customer's experience. If you can effectively present and sell the problem, it will be simpler to persuade the customer of the value of the solution.
Section 4: Solution
In order to illustrate best why your solution is the most effective for addressing the issues, it is best to keep your presentation simple and straightforward. Utilize visuals to emphasize your points further and show what the customer’ lives would look like should they choose to use your product or service. If your idea is truly remarkable, it should not require a lot of words to make your case.
Section 5: Market opportunity
Clearly define your market niche and show how market dynamics will evolve in terms of demand, the number of competitors, and barriers of entry.
There are 3 market metrics that are often used to convey the market potential.
TAM: The total addressable market. For example, in Airbnb’s case, that would be all trips booked globally. In Uber’s case, that would be all car and cab rides booked globally.
SAM: The serviceable available market. What chunk of the TAM could your product theoretically address? Airbnb can target all online bookings, and Uber all inner-city car bookings.
SOM: The serviceable obtainable market. What percentage of the SAM can you realistically capture, considering factors such as competition, regulation, financial bottlenecks, cultural differences, and so on.
Figure 2: Different market metrics
Section 6: Why now?
You have to convince investors that the timing right now is good to build or scale your startup’s product. Show that the market has gained momentum and that there’s a highly lucrative opportunity for you to cater to unmet needs. Answer the question of why there is an urgency to act now and not tomorrow.
Section 7: Product
Talk about your product and showcase its most important features. If you’re pre-seed and do not yet have a well-established product, show your MVP with the most basic functionality.
Section 8: Competition
Provide a brief overview of your main competitors. However, only focus on the leading competitors. A good way to do this is using a two-dimensional chart on which your startup excels or a features matrix.
Figure 3: Competitor Matrix
Section 9: Traction
You need to show that there is actual market demand. Market demand, specifically in the sense of customers that are willing to pay for your product/service. Illustrate proof that your product/service's value added is enough to attract customers’ attention, time, and money. The sought-after traction can be assessed in the form of followers, interviews conducted, products sold, LOIs, and waitlist size (this heavily depends on the stage your start-up is in). This sort of progress can be illustrated well by using a timeline, for example.
Section 10: Team
When talking about the team, show why you are the right one to tackle and solve this issue. As a general rule of thumb, the younger your startup, the more importance will be laid on the founders vis-à-vis the rest of the team. Be wary that there’s a thin line between showing that your team is the right one for the job and just coming across as boastful and enjoying talking about individual achievements. Investors, especially those focused on early-stage startups, are very much focused on founder-market fit. Chances are that your startup’s probability of success is directly linked to how far the founders’ domain expertise overlaps with the target market.
Section 11: Business Model & Financials
To strengthen your thesis of monetizing the value-added you create, it is important to provide number projections. A 3-4 year forecast should include financials and key metrics such as customer count, conversion rate, and products sold. However, for early-stage startups, projections may be largely based on educated guesses due to limited cost structure and revenue data, particularly at the pre-product stage. Thus, the emphasis should be on selecting a practical and scalable business model and pinpointing one primary revenue stream - not multiple. - not 6 (e.g., Ads AND commission fee AND sponsorships, etc.).
Section 12: (Fundraise) Roadmap
You can further engage your audience by including a slide discussing your roadmap for the next 12-18 months. This will give a realistic outlook of the specific goals and most significant challenges you will encounter during this time. As a best practice, be sure to provide information on any major milestones, such as integrating new features, gaining your first 1,000 customers, or upcoming fundraises.
Section 13: Fundraising ask
In this last part of your deck, you should outline the exact amount of capital you intend to raise to reach specific goals (e.g., product launch). Additionally, be sure to explain how you plan to use the funds: how much will you allocate to marketing, R&D, operations, HR salary, etc.? It is essential to assess how you will spend the investor's money carefully and only to raise the amount that is absolutely necessary to keep your equity share to a maximum.
This article has provided a concise look at some of the best approaches to consider when constructing your fundraising pitch deck. Keep in mind that every start-up has its own distinct qualities and thus, may require its own unique approach. Use the above suggestions as a general guideline, but be sure to add your own personal flair. Remember, it is important to keep the audience's perspective in mind and make sure that the presentation covers what they are most likely interested in hearing. We wish you the best of luck!
Download BFG’s Web3 Fundraising Deck Template
For additional readings, we recommend these two pieces from YC on how to build and design a pitch deck.
About Blockchain Founders Group
We are a European company builder and venture capital investor. We believe that blockchain is the biggest investment opportunity over the next decades. Our DNA is composed of academic and regulatory drivers of the blockchain economy as well as ambitious entrepreneurs and venture capitalists. As company builders, we turn blockchain ideas into companies after having vetted them thoroughly with our entrepreneurs in residence and advisors. As venture capital investors, we finance founder teams in the pre-seed/seed stage in the traditional venture capital way coupled with our understanding and active commitment as co-founders.
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Contact: Max Zheng, Head of Corporate Development & BFG Superstars Program, firstname.lastname@example.org
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