Startup Pitch Decks

Common/Key Terms:

<aside> 💡 Venture Capital: Money provided by investors to startups they believe have long-term growth potential.

Market: Who your business plans to sell its products or services to.

Scale: To increase the size, amount, or extent of something—usually related to business growth.

Revenue: The money a business earns from selling its products.

Profit: The money that's left after you subtract your costs from your revenue.

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Components of a startup pitch deck:

Definition: A pitch deck is a presentation used by entrepreneurs to provide their potential investors (VCs) with a quick overview of their business plan. You'll often use it when seeking investor funding.

Elements of a startup pitch deck:

(using the example of Techtron)

1) Problem & Solution: Identifying a problem and how your startup intends to solve it.

1. Pain point: The problem that customers face

   1. Our company Techtron is solving for: The difficulty and inaccessibility of language learning.

2. Value proposition: The unique solution provided by the startup

   1. Techtron Solution: An AI-powered language learning app.

2) Market Size: How big is the potential market for your product/service?

1. TAM (Total Addressable Market): The total market demand for a product.

   1. Techtron's TAM: Everyone in Malaysia wanting to learn a new language (say 15 million people)

2. SAM (Serviceable Available Market): The portion of TAM served by your product.

   1. Techtron's SAM: Online language learners in Malaysia (say 5 million people).

3. SOM (Serviceable Obtainable Market): The portion of SAM realistically reached.

   1. Techtron's SOM: A portion of digital learners they can attract (say 500,000 users).

3) Business Model: How does your business make money?

1. Revenue Streams: Different ways a business makes money.

   1. Techtron's Revenue Streams: App subscriptions, ad revenues, and premium features.

2. Cost Structure: Business costs required to operate.

   1. Techtron's Cost Structure: App development and maintenance, marketing and salaries.

3. Margins: Difference between selling price and cost of production.

   1. Techtron's Margins: Subscription price, ad revenues and premiums minus cost of maintaining the service.

4) Marketing & Sales Strategy: How will you attract and retain customers?

1. Customer Acquisition Cost (CAC): Cost to acquire a new customer.

   1. Techtron's CAC: 10 MYR per customer.

2. Lifetime Value (LTV): Total revenue from a customer over their relationship with the startup.

   1. Techtron's LTV: 300 MYR.

3. Conversion Rate: Percentage of people taking a desired action after interacting with marketing efforts.

   1. Techtron's Conversion Rate: Say if after marketing Techtron is able to reach 2 million users and out of that, 100,000 users download the app, conversion rate here would be (100,000 / 2,000,000) = 5%.

5) Team: Who are the people running the company, and why are they qualified?

1. Advisory Board: Experienced individuals who provide advice and support to the startup.

   1. Techtron's Advisory Board: Seasoned entrepreneurs and language educators.

2. Organizational Structure: How the company assigns people, tasks, and responsibilities.

   1. Techtron's Organizational Structure: A CEO, CTO, marketing team, and a team of developers.

6) Finances: The numbers! How does your business perform financially? What is the revenue? What are your costs? What are your profit margins? What are your future projections?

1. Burn Rate: Rate at which a company spends money vs earnings.

   1. Techtron's Burn Rate: 5000 MYR per month.

2. Runway: Time before the company runs out of money. This takes into account any investment company has + revenue - burn rate.

   1. Techtron's Runway: 10 months.

3. Break-even Point: When a company's revenues and expenses are equal.

   1. Techtron’s Break-even point: To be calculated based on revenue and expenses. Say if after operating for 24 months, Techtron was able to generate enough revenue from which was equal to the total cost spent by the company, we would say 24 months to be the break even point for Techtron

4. Monthly Recurring Revenue (MRR): Revenue a subscription-based business receives every month.

   1. Techtron's MRR: Calculated from the monthly income from app subscriptions. Say 50,000 MYR

5. Annual Recurring Revenue (ARR): Predictable income an organization will receive in a one-year period.

   1. Techtron's ARR: MRR projected over a year so that is 50,000 MYR x 12 = 600,000 MYR

6. Gross Merchandise Value (GMV): Total value of merchandise sold over a period.

   1. Techtron's GMV: Calculated from the total value of merchandise (subscriptions and premium features) sold.

7. Valuation: Estimation of the company's overall worth.

   1. Pre-Money Valuation: Value of Techtron before new investment (for instance, 2 million MYR).

   2. Post-Money Valuation: Value of Techtron after new investment (for instance, if 500,000 MYR is invested, post-money valuation becomes 2.5 million MYR)

8. Equity: Ownership interest in a company.

   1. Divided among founders, employees, and investors. For example, if a new investment of 500,000 MYR is made at a post-money valuation of 2.5M MYR, the new investor receives 20% equity in the company (500,000 MYR as a portion of 2.5M MYR), thereby diluting the existing equity holders' percentage ownership.