The right set of investors can be a deciding factor in your startup journey. At LUMIQ, we build AI-powered products for financial enterprises. Getting early backers who believed in our vision was crucial for us.
Thanks to the rapid digitisation, many AI startups are attracting investor interest and are raising capital like never before. According to AIM Research, AI startups saw a 32.5 percent (USD 1,108 million) year-on-year rise in funding in 2021 – the highest surge in seven years. Further, the report showed companies had been increasingly adopting conversational AI, automation, and analytics into their solutions.
AI product companies tend to scale much faster than service companies. Nearly 72 percent of businesses believe AI will significantly impact their product offerings in the next five years.
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In this article, I will talk about learnings from my AI startup journey and things to keep in mind when pitching your ideas or products to investors.
Clear, concise pitch deck
A well-designed, comprehensive pitch deck is critical to convincing investors of your company’s growth potential and getting the necessary resources to scale. A pitch deck is a presentation entrepreneurs put together for seeking capital from investors. On average, a pitch deck consists of 15-20 slides showcasing the company’s products, technology, and team.
According to The Art of Startup Funding author Alejandro Cremades, founders should maintain two pitch decks – a text-heavy version that can be shared via email and another interactive version full of visuals and infographics for in-person presentations.
The pitch writing process brings clarity to your thought process and nudges your mind to unexplored potential. A good pitch deck will lead to:
- Cohesive and objective gameplan
- Crucial feedback from industry experts
- Higher investor engagement
- Better networking
Open with a hook
Depending on the context, you might have to present your pitch verbally, i.e. without a visual backup. Your pitch should be written in a way that does not rely on slides to make your case. It would be best to start the pitch with a hook to get your listeners’ or readers’ attention.
Present your target problem
Once you have the investors’ attention, the next step is presenting the problem your startup’s trying to solve. You need to include data or testimonials to validate your claims.
Offer an original solution
After you have presented the problem, the next slide should be about the solution to the problem. You should break down the solution in simple terms without going into the weeds.
List your team
The next slide should be on the team composition. The investors won’t bankroll your startup unless they believe in your team. Hence, it’s important to present your team line-up, complete with key stakeholders, to the investors to gain their confidence.
For good reasons, the business model is the most important element of the pitch. The investors base their ROI timelines on the startup’s business model. The startups should have a well-thought out strategy to monetise their products and services to attract investors.
Close off with a call to action
Lastly, ask investors for follow-up questions. Your slide should have contact details and a call to action.
Dos & Don’ts
There is no one-size-fits-all framework for creating a pitch deck. But, here’s a checklist to optimise your presentation and ensure the required capital for your business.
- Incorporate this message at the bottom left of the pitch deck cover page: “Confidential and Proprietary. Copyright © by (name of the company). All rights reserved”.
- Include interesting graphics and images.
- Always send the pitch deck in a PDF format to prospective investors before a meeting or interaction. Please don’t ask the investor to get it from Google Docs, Dropbox, etc.
- Make sure to have a demo of your product.
- Show proof of concept if you have one.
- In the pitch deck, use a consistent font, font size, colour, layout, and header.
- The pitch deck should be between 15-20 slides. If you need more slides, include them as an appendix.
- Don’t be wordy, and avoid weasel words.
- Do not cover everything in the pitch deck.
- Avoid using jargon or acronyms that the investor may not immediately understand.
- Avoid underestimating or belittling the competition.
- Avoid using pixelated graphics or low-quality images. If possible, hire a graphic designer to give your pitch desk a more professional look.