Designing the pitch deck is the culmination of your entrepreneurship training with the best startup accelerators. Your mentors will direct you on how to design the presentation for pitching to investors, and the most crucial element is preparing the asking amount. In other words, you’ll talk about how much money you need to get your new venture off the ground or spur further growth. Read ahead to understand how to do that.
Your ask is perhaps the most important part of your entire pitch deck and pitch. This one number or sentence can really make or break all of your efforts. All of the weeks and months of preparing your pitch, loading your data room, honing your business, hustling late at night, designing your pitch deck slides, and networking, all come down to this one moment.
So, how do you make the most of it, set it up right, and follow through?
There can be a lot of distractions on the way to this moment. You can be digging into your story, getting sucked into the design of slides, and all the while pushing your company’s projected metrics so that your business is in shape for investors.
There can be a lot of different inputs, opinions, and perspectives on the way here. All may be valuable for making the best of each factor and detail. Yet, it is vital not to lose focus on the whole point of this process and effort. That is to put the money in the bank, right? Or at least to bring in highly desirable investors who can help pull and launch your venture forward.
So, whether you are just starting out debating pitch deck design options, or you’re just double checking your work, or have had some investors turn you down already and need to tweak your pitch, what should you be thinking about and evaluating?
You may even still be debating exactly how much money you should ask for in this round. The main goal at each funding round is to simply raise enough to get you through to the next round, or exit event. This is determined by how much your burn rate is. That is how much money you estimate will be burning each month. Multiplied by the number of months until you raise and close on another round of financing.
Remember to add a significant cushion to your expectations. Everything takes longer than you expect and costs more than you think. If you think you will raise again in 6 or 12 months, you may want to add another 6 months of cushion to that. If you raise early, you will be in a much stronger negotiating position. You won’t have to give away as much. Be sure you are factoring in inflation, as well as some extra funds in case it takes longer and costs more to hit that next milestone.
If you want to be more technical and strategic, there is certainly some sales psychology that can be applied to the amount you ask for. Certain numbers are more likely to get conversions. Or you may want to be super bold and throw out a number that will get attention, and perhaps provide some value and credibility in itself. For example, instead of just asking for $80M, why not round up to the magic $100M figure? The same goes for $1B, or $3B.
When you’re pitching investors at the end of your startup accelerator program, half the battle is already won. The program invites investors who are keen on funding innovative ideas, and your acceptance into the program is validation enough that your idea has what it takes to make it big. Even, so, make sure to carefully calculate and estimate your asking amount before adding it to the pitch.