7: Pitch Deck Monetization Slide
10 Slides to VC Funding Success
Sales ARE OPEN for My New Book!
“Angel Investors to Venture Capital – 10 Slides to Startup Funding Success – Entrepreneurs Guide to Startup Fundraising”
❏ Today in Part 7 of my series on 10 Slides to VC Funding Success, I’ll speak on 7: Pitch Deck Monetization Slide – 10 Slides to VC Funding Success (Link).
The Monetization Slide is the seventh page of every successful VC Pitch Deck. After having discussed the Competition slide, you should immediately launch into describing how you make money. What do I mean by Monetization? Monetization is a list of all of the different ways you will make money.
For example, let’s say your company has designed a new wine bottle opener. You make money when you sell the wine bottle opener.
If you sell a 3-year warranty plan, then you make money selling that service.
If you have an application that allows your customers to store a list of all of their wines, then you make money selling that service.
In general, the more ways you make money, the stronger your business and the easier it will likely be if you seek to raise funds from investors.
What is the Monetization? You will learn in this article the answer to this question and what is essential to show on your Pitch Deck Monetization Slide.
My History:
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 Monetization Slide – Why Important?
Last week in 6: Pitch Deck Competition Slide – 10 Slides to VC Funding Success (Link), I spoke about the Competition slide and its importance. This week I’m talking to the Pitch Deck Monetization Slide, the seventh page of every presentation and its significance. After having discussed the Competition slide, you should immediately launch into describing how you “Make Money.”
Why? Your investor audience is now clear on who your Competition is, Market size, Why your Solution Rocks. Now they’re ready to learn the answer to “How do You Monetize your Product or Service?” In layman’s terms, How do You Make Money?
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 Monetization Slide – Content
The contents of your Pitch Deck Monetization Slide content depends on your type of business. Physical products have a different Monetization method than a Software-as-a-Service (SaaS) business.
If you have a physical product, the slide will want to show information related to the product costs. Plan to share the Manufacturing costs, average-selling-price (ASP), margins (by variant), sales channels, etcetera. Display the Monetization methods in one or two pie charts, perhaps combined with a short table or a few bullets.
If you have a Software-as-a-Service (SaaS) company, this slide will focus on your service pricing variants. Account setup charge, monthly fees, Customer-Lifetime-Value (CLV), Customer-Acquisition-Cost (CAC), Add-on services, Monthly Customer Growth. Again, a pie chart or two, along with a short table or a few key bullets, is all you need.
Pitch Deck Monetization Slide – What’s Your Story?
So, what do you say while your Pitch Deck Monetization Slide is visible? Point out your high margins on each product/service and variation. Speak to your sales channels and how much revenue each generates now and over the next 1-2 years. Talk about your customer acquisition costs and what you are doing to lower them. Speak to how your customers pay you. Do they pay before you deliver the product or service or after? Do they pay by credit card, cash or check? Speak to how you are lowering your costs. Again remember you’ve only got 45-60 seconds, so focus on three key points. Allow me to share one pitch example.
“We are a Software-as-a-Service (SaaS) business. We make money by charging our customers a one-time setup fee and a monthly service fee. Our Bronze, Silver, and Gold packages are priced at $100, $250 and $500 per month respectively. Setup fees are $495, $995 and $1995, respectively. By dollar, sales by the package are 40%, 30%, and 30%. We also offer additional add-on services. Our Setup costs are $27, $55 and $102, respectively. Our monthly Service delivery costs are $72, $96 and $114, respectively. Customer acquisition costs after six months of sales are $47 average across all tiers. 87% of sales are direct. 13% is via various distribution channels who get 30% of monthly sales year one, 10% year two and zero after that. We estimate our average customer lifetime value to be two years and $3800”.
Wow! You’ve got an impressive, high margin business! The investor has the key metrics on how you make money. You’ve got them excited to the point that they will have lots of follow-up questions for a “Second Date.” Well done!
Presentation: 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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Conclusion
So, I suspect many of you were surprised concerning the importance of the Pitch Deck Monetization 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 Monetization 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.
Sales ARE OPEN for My New Book!
“Angel Investors to Venture Capital – 10 Slides to Startup Funding Success – Entrepreneurs Guide to Startup Fundraising”
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