Top mistakes startup founders make in their pitch in July 2024
Hundreds of eager founders have put their pitch decks through the rigorous scrutiny of the Pitch Guide AI review bot. While the bot's feedback has undoubtedly been a treasure trove of insights for those founders, it has also provided me with a goldmine of information. This feedback loop has illuminated not the strengths and knowledge of these founders - and the areas where they stumble and require additional guidance.
Okay, you don’t have to catch on fire even if you screw up your pitch deck. Every common mistake highlighted in this article links to in-depth articles for how to resolve each issue!
With nearly nine months of data now tucked under the bot’s metaphorical bonnet, it’s the perfect moment to dive deep into the analytics. The patterns and trends we've uncovered paint a vivid picture of the current state of startup pitches. From the common pitfalls to the unexpected gems, this treasure trove of data reveals where founders are excelling and where they're falling short.
So, buckle up as we journey through the most common mistakes startup founders make in their pitch decks. These insights could very well be the key to transforming a good pitch into a game-changing one:
Key Takeaways
Diving into the raw statistics, several key takeaways stand out like bright neon signs.
It's important to note that I've set aside the venture scale element for this analysis. While it offers a broad gauge of a deck's overall competence, it doesn't lend itself to a precise, slide-by-slide evaluation. Likewise, I've not dissected the overall story judgment. Storytelling, after all, is an art form—a subjective blend of narrative and nuance that resists reduction to mere numbers.
What I’ve focused on instead are the concrete, actionable insights that emerged from the data. These are the recurring themes and stumbling blocks that, if addressed, could significantly elevate the quality of your pitch. So, let's dive into the specifics and see what the data has to reveal.
A breakdown of the slides founders most commonly get right, screw up, and miss out alltogether.
What can we learn from the slides founders get right?
Not including an exit strategy - One of the most consistent wins across pitch decks is the absence of an exit strategy slide. Surprisingly, the vast majority of founders are nailing this aspect by simply not including one.
This is excellent news. As a founder, your primary focus should be on building the strongest, most resilient company possible—not on fantasizing about a potential exit that might or might not happen a decade down the line. Investors are far more interested in your dedication to the journey than in your endgame plans.
The omission of an exit strategy slide signals to investors that you're in it for the long haul. It demonstrates your commitment to growth and innovation rather than a quick payout. This mindset is crucial in the startup world, where the road to success is often long and winding. By focusing on the present and immediate future, you show investors that you're dedicated to creating lasting value and impact.
Nailing the solution - When it comes to presenting a solution, about 77% of decks hit the mark with a solid slide. A well-crafted solution slide is essential; it offers a broad-strokes approach to tackling the identified problem without delving too deeply into specifics or technical jargon.
This slide is your chance to present an elegant, overarching view of how your product or service will address the issue at hand, and many founders are getting it just right.
A great solution slide balances clarity and conciseness. It should convey the essence of your product's value without overwhelming your audience with details. Think of it as a high-level pitch within your pitch—an opportunity to spark interest and curiosity.
The goal is to leave your audience with a clear understanding of what you offer and why it matters, setting the stage for deeper dives into the specifics later in your deck.
Explaining the problem you’re solving - Nearly 70% of the decks evaluated by the bot feature a compelling problem slide. This indicates that most founders have a keen understanding of the issues they aim to solve and can clearly articulate the negative impact these problems have on people's lives.
A strong problem slide is foundational—it sets the stage for the entire pitch by highlighting the necessity for your solution.
By clearly defining the problem, founders can connect with their audience on an emotional level. Investors and stakeholders need to see that the problem is real and significant enough to warrant a solution. This slide should paint a vivid picture of potential customers' pain points and challenges, creating a sense of urgency and relevance.
When done right, it lays a solid foundation for the rest of the pitch, ensuring that the solution is perceived as not just nice to have, but essential.
Crystallizing the value prop - Identifying a problem and proposing a solution is just the beginning. Founders also need to convincingly demonstrate how their product offers tangible, measurable benefits to customers.
Statements like "It's better than what we do now!" are not enough. A solid value proposition slide should clearly outline the advantages and improvements your product brings. Currently, just over 60% of decks showcase a viable value proposition, indicating that there's still room for improvement in conveying this critical aspect.
A compelling value proposition answers the fundamental question: Why should anyone care about this product? It should highlight the unique benefits and competitive edge that your solution provides. Whether it's cost savings, increased efficiency, or innovative features, the value proposition slide must make a persuasive case for why your product is the best choice. This clarity helps investors see the real-world impact of your solution, making it easier for them to envision its market potential and user appeal.
Sizing and explaining the market - Finally, showcasing a substantial and growing market is crucial for attracting VC interest. Even the most innovative solution can appear as a poor investment prospect without evidence of a large, expanding market.
About 55% of the reviewed decks include a slide that outlines the potential market size. This slide reassures investors of the startup's scalability and financial potential, making it a key component of a successful pitch deck.
Detailing your market involves more than just numbers; it's about representing future growth and opportunity. Investors want to see that there is a significant demand for your product and that the market is not only large but also expanding. This involves highlighting trends, target demographics, and potential for market penetration. A well-crafted market slide provides a roadmap for how your startup can capture and grow within its niche, convincing investors that your business is poised for long-term success.
Where are founders struggling with their decks?
There are two primary ways to assess where founders are hitting snags with their pitch decks: identifying slides that raise red flags and examining those that fail to hit green flag targets.
A red flag indicates a significant issue with a particular slide, signaling an active problem. Conversely, we can pinpoint where founders struggle overall by looking at how many decks don't achieve a green flag for a slide. This struggle might manifest as errors, incomplete execution, or outright omission.
To gain a broad perspective, we'll focus on slides that not only raise red flags but also show a substantial lack of green flags. Analyzing the AI bot’s stats reveals that the lowest-scoring slides in terms of green flags are a mix of those with high red flag counts and those frequently omitted. By understanding these patterns, we can better address the areas where founders need the most help.
The breakdown of the slides founders get wrong (red flags), or merely don’t get quite right (‘not green’)
Use of Funds - Well over half of the decks reviewed by the bot struggle to present a compelling case for their use of funds.
When investors evaluate your pitch, they want reassurance that you have a strategic, responsible plan for deploying any raised capital. This plan should be detailed and SMART (Specific, Measurable, Achievable, Relevant, Time-bound), showing clear milestones that align with your startup's growth trajectory.
What investors want to see: ‘$200,000 to hire a head of sales and two agents by November 2024 who will concentrate on winning our five target customers.’ This level of detail provides confidence in your foresight and operational planning. Conversely, vague statements like ‘10% sales’ are red flags, lacking clarity and strategic depth.
The traction slide is a stumbling block for 43% of decks. Traction demonstrates the steps a founder has taken to de-risk their business, making it a safer bet for investment.
The most compelling form of traction is revenue, but even pre-revenue businesses should showcase meaningful progress. This might include MVP trial results, feedback from focus groups, patents, or meeting regulatory demands.
Pre-revenue traction examples illustrate your startup’s potential and progress, proving that you’re on the right path. Avoid vanity metrics—figures that look impressive but lack substance. Instead, focus on metrics that reflect genuine progress and market validation. This approach reassures investors that your startup is not just a concept but a growing venture with real potential.
The team slide is crucial, yet 42% of decks receive a red flag here. Remember: Investors are essentially betting on the team when they invest in a startup.
A strong team slide should showcase your team's unparalleled knowledge, founder-market fit, adaptability, and resilience. Highlighting relevant experience and skills is key to building investor confidence.
Your team slide should also convey a sense of unity and shared vision. Investors need to believe that your team can overcome challenges and drive the company forward. Personal anecdotes, past successes, and a clear alignment with your startup’s mission can add depth and credibility to this slide, making it a vital part of your pitch.
Many founders stumble with the go-to-market strategy, with 32% of decks flagging issues. Often, these strategies amount to little more than vague plans like ‘We’ll use social media to get our product in front of potential customers.’
A robust go-to-market strategy should detail how you will introduce your product to your beachhead market, grow from there, and the associated costs.
Investors want to see a clear, actionable plan that outlines specific marketing and sales strategies. This includes target demographics, channels, tactics, and timelines. A well-thought-out go-to-market strategy demonstrates that you’ve done your homework and are prepared to scale effectively, which is crucial for gaining investor confidence.
The ask on a pitch deck needs to be clear and straightforward, yet 30% of decks struggle with this. Your ask should be a single figure, free from ranges, future raise suggestions, or attached terms and valuations.
This simplicity helps investors understand exactly what you need and aligns their expectations.
A clear ask shows that you have a precise understanding of your financial requirements and how they fit into your overall growth strategy. It also streamlines negotiations and aligns everyone on what success looks like. Avoid complicating this section—clarity and simplicity are your allies here.
Omitted Slides and Their Impact
There are a few slides that get missed more commonly than others. That’s not great news: Here’s what they are, and how you can adjust it.
An astonishing 90% of decks lack an operating plan. This slide should outline where a startup will spend money and generate revenue until the next funding round.
It doesn’t need to be overly detailed but should be realistic and defendable, providing a fiscal roadmap for your startup.
Including an operating plan demonstrates that you have a strategic approach to managing your resources and achieving your milestones. It reassures investors that you’re prepared for the financial challenges ahead and have a clear path to follow, making your startup a more attractive investment.
Unit economics is another critical area often omitted, with 86% of decks failing to include it. This slide should illustrate how costs and revenues evolve as the company scales, highlighting economies of scale.
Including unit economics shows that you understand your business’s operational dynamics and long-term profitability.
Investors look for clear evidence that your startup can grow sustainably. By showcasing how unit costs decrease as production increases, you can build a compelling case for your startup’s scalability and financial viability. This slide is crucial for demonstrating that you have a deep understanding of your business model.
Acknowledging the challenges your startup faces can strengthen your pitch. While not necessarily a standalone slide, highlighting what’s hard about your startup underscores its importance and the barriers to entry for competitors.
It shows that you’re realistic and prepared for the obstacles ahead.
Addressing these challenges head-on can also reinforce your commitment and resilience. It demonstrates that you’ve thought through the difficulties and have plans to overcome them, making your startup a more robust and appealing prospect for investors.
Just over 55% of startups fail to articulate why the time is now for their venture. Timing is crucial in the startup world, and you need to demonstrate why now is the perfect moment for your solution.
Explain why it wouldn’t have been possible five years ago and why ten years from now would be too late.
Highlighting technological advances, market trends, and regulatory changes that make your solution feasible and necessary now can add urgency to your pitch. Investors need to see that your startup is poised to capitalize on current opportunities, making it a timely and attractive investment.
About 48% of decks don’t provide evidence of their startup’s moat—protections against competitors.
A strong moat slide should highlight what makes your team unique, what aspects of your product are hard to replicate, and what you’ve accomplished to stay ahead of the competition.
Investors want to know that your startup can maintain a competitive edge. By detailing your unique strengths and competitive advantages, you can reassure investors that your startup has the potential to dominate its market and fend off challengers, making it a more secure investment.
To up your game, focus on these key areas: Make sure your use of funds is clear and strategic, show real traction, highlight your awesome team, and detail how you’ll take your product to market.
Don't forget those often-omitted slides, either—they're crucial for showing investors you mean business. And for a little extra help, give the AI-based pitch deck review tool a try. It’s packed with insights to help you refine your pitch and make it shine.
You’ve got this—now go out there and wow those investors!