5: Pitch Deck Traction Slide
10 Slides to VC Funding Success
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“Angel Investors to Venture Capital – 10 Slides to Startup Funding Success – Entrepreneurs Guide to Startup Fundraising”
❏ Today in Part 5 of my series on 10 Slides to VC Funding Success, I’ll speak on 5: Pitch Deck Traction Slide – 10 Slides to VC Funding Success (Link).
The Traction Slide is the fifth page of every successful VC Pitch Deck. After having discussed the Solution slide, the mind of your audience is asking “What market Traction do you have?”. What does Traction mean? It depends on whether you have any sales yet. If you do have sales, it is as simple as how much sales you have had. If you have not yet had sales yet, then Traction is a measure of what customer interests and commitment you have gotten.
What is the Traction? You will learn in this article the answer to this question and what is essential to show on your Pitch Deck Traction Slide.
One of my responsibilities as an Executive Coach is helping company founders with the creation of their Investor Pitch Deck. Throughout my career, I have created and reviewed many Investor Pitch Decks. Some of our team’s Investor Pitch decks, especially early in my startup career, upon reflection, were “horrible.”
Sometimes our teams were successful in raising monies from investors. Many times they were not.
I never thought that the content and presentation style of the investor pitch deck might be hurting us. Boy, was I ever wrong! By working with many investors, I’ve learned what they want in an Investor Pitch Deck. In my last company, we raised $87M over rounds A, B, and C.
So in this series and an upcoming book, I look to share my hard-learned lessons from 20+ years of being an Entrepreneur.
The Investor Pitch Deck Series:
In this series you will learn the order and the importance of each of the following Pitch Deck Slides:
- Cover Slide (Link)
- Problem Slide (Link)
- Market Slide (Link)
- Solution (Link)
- Traction (Link)
- Competition (Link)
- Monetization (Link)
- Financials (Link)
- Team (Link)
- Ask (Link)
This 10-part series covers the ideal content, order, and flow of the ten Investor Pitch Deck Slides. You’ll have learned how to craft your story into a successful ten-page Investor Pitch Deck that can get you funded!
When an Entrepreneur is putting together their Investor Pitch Deck, they usually assemble a hoard of information. Sadly, often what they construct is a “book” that is 20, 30, even as much as 80 pages in length! Most of us humans have a very short attention span. Even ad networks know that most ads longer than 30 seconds in length don’t work with consumers. For Investors, the successful length of an Investor Pitch Deck is about ten pages and 7-15 minutes in presentation length.
Pitch Deck Traction Slide – Why Important?
Last week in 4: Pitch Deck Solution Slide – 10 Slides to VC Funding Success (Link), I spoke about the Solution slide and its importance. This week I’m talking to the Traction Slide, the fifth page of every presentation and its significance. After having discussed the Solution slide, the mind of your audience is asking “What Market Traction do you have?”.
Why? First, you’ve whetted your audience’s appetite with your Solution to the Problem and the Market size. Your audiences brain is now poised to hear how you’ve proved your Market by showing who wants your Solution!
If you’ve followed this series, and your investor’s in your Market space, they’ll be on the edge of their seats!
Pitch Deck Traction Slide – Content
Look at the example image for this post. What do you see? You see a bunch of company logos! Why? These are the badges of your initial customers who are proving your Solution’s value. They are either buying from you or are evaluating your product/service for purchase. The logos on this slide convey how much market Traction you have. If you have 50+ customers, you want to pick those that are either the largest or best audience recognition.
What if you don’t yet have customers even in the evaluation stage? Simple, in most cases, this means you are presenting too early. I would not want to take monies from friends and family yet. It’s best to get some MVP (Minimum Viable Product) to show potential buyers before raising funds. I know that this is not always possible. Keep in mind that if you don’t have any proof that your concept has ready buyers, you are higher risk, meaning you’ll have a smaller pool of potential investors. It also says that investors will demand a much more significant “share” of your company if they invest. It’s best to bootstrap (Link) your firm until you have an MVP to show.
Pitch Deck Traction Slide – What’s Your Story?
So, what do you say while your Pitch Deck Traction Slide is visible? If you use company logos for the visual content, you’re going to share information about 3 of these companies! Why three? You’ve got less than a minute on this slide. Most people can’t remember more than three points about any transparency. More than three points per slide will devalue much of what you say.
So what are you going to say about each of the three companies? Speak to their size in potential to buying your product. Next, speak to the level which they are currently engaged. Are they in evaluation? Have they placed purchase orders? Have they already made purchases that you’ve delivered? How much have they purchased?. That’s it. You’re out of time, and you’ve made your point. Allow me to share an example.
“Our largest client is IBM. They have completed evaluation and purchased their first 100 seats. We expect them to buy 250 more seats over the next 12 months. Our next largest client is Sales Force Corporation. They have purchased 20 seats. We expect them to buy 100 more over the next 12 months”. Our third largest client is Mozilla. They have purchased ten seats. We have 17 other clients currently in the evaluation phase.”. Remember, this is a “first date.” Your audience needs a “taste” of your Traction, not a full meal!
We Can Read or Listen – Not Both!
Most of us humans can either “Read” or “Listen,” but cannot do both at the same time. Your Pitch Deck slide presentation exists to support “the story” you are going to be telling your audience. Does your Investor Pitch Deck has a lot of words, charts with numbers, or distracting images? Then your audience is going to switch their brain into “reading mode” and out of “listening mode.” As soon as that happens, you’ve lost your audience and will struggle to get them back to listening to YOU! To avoid this, use mostly images and as few words as possible, usually in bullet form. So absolutely, positively NO SENTENCES!
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So, I suspect many of you were surprised concerning the importance of the Pitch Deck Traction Slide. If you’re starting you create your first investor presentation, congratulations! You’re going to be starting on the right foot if you follow my recommendations above. Go back and look at your Traction Slide and apply what you’ve learned above. If possible, you should wait to read the remainder of the series before you present again. I can almost promise you a better reaction from your audience.
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