10 Slides to Funding Success
The Monetization Slide
Part 7 of 10
Startup Capital: 10 Slides to Funding Success – The Monetization 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 helped create 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. Today I will discuss “Startup Capital: 10 Slides to Funding Success – The Monetization Slide – Part 7 of 10”.
When an Entrepreneur is putting together their Investor Pitch Deck, they usually assemble a hoard of information. Sadly, often what they assemble 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.
This 10-part series covers the ideal content, order, and verbiage of the ten Investor Pitch Deck pages. You’ll have learned how to craft your story into a successful ten-page Investor Pitch Deck that can get you funded!
Monetization Slide – Why Important?
Last week in Part 6 of “Startup Capital: 10 Slides to Funding Success“, I spoke about the Competition slide and its importance. This week I’m speaking to the Monetization Slide, the seventh page of every presentation and its importance. 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 Solutions “Rocks”. Now they’re ready to hear “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!
Monetization Slide – Content
Your Monetization slide content depends on what type of business you are in. 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. Manufacturing costs, average-selling-price (ASP), margins (by variant), sales channels, etcetera. These are best shown in a pie chart or two, 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.
Monetization Slide – What’s Your Story?
So, what do you say while your 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 thereafter. We estimate our average customer lifetime value to be two years and $3800”.
Wow! You’ve got an awesome, 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!
So, I suspect many of you were surprised with respect to the importance of the Monetization Slide. If you’re starting you create your first investor presentation, congratulations! You’re going to be starting off 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.
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If you subscribe to my FREE Business Coaching Newsletter, I’ll also offer you a discount coupon to my book “Startup Capital: 10 Slides to Funding Success”. In the book, I do a more detailed dive into each of the ten slides. You’ll see both good and poor examples of each of the ten topic slides. I’ll also discuss good and poor examples of presentation techniques. You’ll learn how to identify “Lookie-Lou” investors from “serious investors” who will really write you a check. I’ll teach techniques for how to overcome nervousness, stuttering and “brain-freeze” during your presentation. You’ll learn appropriate attire and why showing up even a minute late can doom a presentation.
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Next time …
In the next blog post, I will write about “Startup Capital: 10 Slides to Funding Success! The Financials Slide – Part 8 of 10”.
Read a Previous Post: “Startup Capital: 10 Slides to Funding Success! The Competition Slide – Part 6 of 10“
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