How to show the amount to raise in a pitch deck?
Crafting a pitch deck is driven by asking for the money and getting your startup funded. While there may now be quite a bit of content out there on designing a pitch deck and many of the slides you’ll need, there is surprisingly little on how to show the amount you want to raise in a pitch deck and positioning your ask.
What’s the best way to do it?
What Amount Should You Be Raising?
How much money are you hoping to raise in this specific funding round? How did you come up with it?
It often seems like entrepreneurs just pick a big arbitrary number out of the sky to request. Sooner or later in your presentation, you’ll have to justify your ask and show some math for how you came up with it.
Rounding up a little may not be a bad thing, though there has to be some type of logic behind it. Put yourself in the shoes of an investor. If you’ve been shrewd and disciplined enough to make enough extra money to invest lump sums of capital across startups like this, then you aren’t just going to throw it around without doing some basic math. Or at least asking some good questions.
Those who work for venture capital firms and are liable for representing the interests of their own investors’ money also have to be able to justify the math and investment to them.
So, how should you calculate your ask? In other words, how to show the amount to raise in a pitch deck? That’s a critical facet of your investor pitch template.
Looking for more information on how to identify the best sources of funding for your business? Check out this video I have put together for you.
How much are similar startups at the same round raising for their own businesses? This is a good starting point for positioning your raise. If you are proclaiming that you have a strong competitive advantage over them, and larger potential, then how much more should you be asking than they raised?
What hiring needs do you need to raise money for to help grow your business? This can be one of the stronger reasons to raise money, and your investors are going to want to bet on the startup in this space with the best team.
How much money will you need to continue to cover operating expenses until you can reasonably expect to close on another round of funding?
Between salaries, workspace, equipment, software, communications, marketing, licenses, taxes, etc., what will it cost per month to stay afloat? Don’t forget to account for inflation.
How long you’ll have to survive before getting more funding can vary depending on broader markets. On average this is usually 12 to 18 months.
Assuming you are starting your fundraising at least six months in advance. It may come earlier, but it is risky to bank on that. In tougher economic times startups may want to prepare themselves with at least 24 months of runway in the bank.
Achieving Your Next Milestone
Raising another round of funding may rely heavily on being able to reach the next stage and milestone you are raising for now. If you can’t deliver, then how can investors trust you to make it with more money?
So, what is the next level for you? Is it completing a prototype, proving product-market fit, or scaling to a certain marker?
What capital is needed to cover the hard costs and marketing required to get there?
Your Fundraising Strategy
Are you shooting big and bold out of the gate for a big round of capital that will fuel your credibility? Or will you start low, with the goal of getting oversubscribed and extending the round later?
Keep in mind that in fundraising storytelling is everything. In this regard for a winning pitch deck to help you here, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
The Fundraising Ask Slide
This is a clean, simple slide. Stick to a few bullet points. How much are you asking for? What categories of spending will it be used to fund?
Think it through from an investors’ perspective. What types of expenses and investments seem like a good risk or have a strong potential for returns?
Positioning Your Fundraising Your Ask
Positioning your ask starts much earlier as you set up your request with your previous slides. It’s one of the critical reasons why you must understand how to show the amount to raise in a pitch deck?
Your Market Slide
How big is the market you are taking on? who are the customers you’re targeting? How much bigger is this space projected to grow? In translation, how big is the potential for their investment to grow and multiply if they get in now?
Your Financials Slide
Projecting out over the next three to five years, how much of this market are you forecasting to take? What are growth expectations for your specific business within this timeframe? What real revenues do you expect to create?
How much of that will be actual profits? What tangible business value will be created in the next few years that will not only offer growth prospects, but provide downside risk protection for your capital invested?
Your Traction Slide
If you have proven the problem you are striving to solve, have a big market to tackle, and have been able to predict your financials, what real traction have you been able to achieve so far?
What real proof of your concept do you have? What real progress have you been making towards your goals and in demonstrating your ability to deliver on your goals?
Identify what is real that investors can actually bank on.
Which other investors have believed in you enough to vote their confidence with their capital? Who has been involved in your previous fundraising rounds? Who has pledged to participate in this round, or even lead it?
Figure out these answers when working out how to show the amount to raise in a pitch deck.
You may find interesting as well our free library of business templates. There you will find every single template you will need when building and scaling your business completely for free. See it here.