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LEAP OF FAITHPITCHING A
A guide to building a high impact pitch deck
RAYMOND LUK
Pitching A Leap of Faith | © Raymond Luk 2021 2
TABLE OF CONTENTS
Introduction 4
Chapter One
Deep dive on the problem
11
Chapter Two
Explain the market opportunity
20
Chapter Three
How do we make money?
36
Chapter Four
Team, Traction & The Intro
46
About the author
& Hockeystick
54
Pitching A Leap of Faith | © Raymond Luk 2021 3
W hy should you read another resource on building your pitch deck?
There are hundreds of guides out there and countless opinions
about what’s right. As you read this, somewhere in the world on a Zoom call
or in a boardroom, an entrepreneur is hearing feedback on their deck, such
as:
This guide is different. You won’t learn how to game the system to get a top-
tier VC to invest. This isn’t a template where you fill in the blanks. I can’t tell
you how to build a great business.
A Leap of Faith is a guide for using your pitch deck to tell your unique story,
ensuring all the components support each other and avoiding the mistakes
that most entrepreneurs make.
Pitch decks are the standard for how tech startups engage with venture
capitalists, but the principles in this guide apply to any business, any type of
funding, at any stage.
Instead of giving you assorted tips for each slide, I explain how the slides
in a pitch deck are connected to each other. I guide you through a clear
and understandable process for building a pitch deck that tells a single,
compelling story.
“Your market’s not big enough”
“I know three people doing the same thing. But better”
“Your unit economics don’t show you can ever make money”
Introduction
Pitching A Leap of Faith | © Raymond Luk 2021 4
How to use this guideIf you haven’t started your deck yet, this guide will help you get started. You
should complete each chapter before going on to the next. Breaking up
your slides also makes it easier to scrutinize each section on its own before
putting them together to tell your unique story
If you already have a pitch deck, you can jump right to the sections where
you need help. But if you’re out there pitching, keep in mind that you’re
probably not getting feedback on just one slide. This guide will help give you
tools to do an overall evaluation of your deck.
When you pitch an investor, you’re asking them to make a leap of faith. Why?
Because you’re raising funds to invest in the future. Not everything is certain.
That’s true whether you’re applying for a bank loan or finding an Angel
investor to bet on your idea.
Your job and your pitch deck’s job is to bridge the gap between where you
are now and that future you’re trying to build. You don’t need to bridge the
entire distance, but you need to narrow that gap, so they feel safe taking that
leap.
Practically, this means you need to show traction. It can be the launch of a
minimum viable product (MVP), landing pilot customers, filing a patent or
doing customer research. Every case will be different, and every investor will
be comfortable ‘leaping’ a different distance.
A lot of entrepreneurs think investors want you to ‘de-risk’ an opportunity.
This is not the right way to look at it. No matter what they say to you, investors
are more motivated by greed than fear. Most conversations about risk arise
because the investor isn’t convinced the opportunity is big enough relative
to the risk. Or they love the potential but doubt whether you can achieve it
with your team or resources.
Why A Leap of Faith?
Pitching A Leap of Faith | © Raymond Luk 2021 6
Anyone who’s pitched knows how difficult it is to decode the feedback.
You met an investor who said they would be interested if you hit certain
milestones. Then you went back when you achieved them but they’re still
not willing to invest!
The more you pitch the more different and sometimes opposite feedback
you get. Your neck will start hurting from swiveling. Who should you believe?
Feedback on your pitch deck is not one thing, but a combination of things.
It’s feedback on your overall business. Do they like
your kind of business or are they just not that into
cryptocurrency exchanges? This is about fit between you
and them.
It’s feedback on what stage you’re at. You’re too early for
their fund.
It’s feedback on the pitch deck itself, which this guide
willbe helping you with.
It’s feedback on you. Do they like you? Do they believe what
you say and how you say it?
Why pitch deck feedback is so confusing.
Pitching A Leap of Faith | © Raymond Luk 2021 7
So when you get feedback like, “you’re too early, come back in six months
when you have more traction,” you have to decode what that means. It might
mean exactly what it says, and it might be a polite way to say ‘no.’
The good news is that you don’t need to know what an investor is saying
100% of the time. You’ll develop this skill with experience. But feeling
confident about how you’ve put together your pitch deck will help you
feel less confused. You’ll be able to separate feedback about the deal from
feedback on your strategy.
Feedback on your deal, positive or negative, gets you to yes, or no faster.
That’s good. Feedback on your strategy can sometimes be useful but might
not be. As the saying goes, when you ask for money, you’ll get advice.
Pitching A Leap of Faith | © Raymond Luk 2021 8
When you’re grinding through pitch deck revisions, it’s easy to lose sight of
basic things going through the investor’s minds when they go through your
pitch deck.
“Explain it to me like I’m five.” A lot of pitch decks fail at this basic principle in
the rush to cram in everything great about a company. Much of what’s in a
pitch deck is confusing and unclear because not enough effort was made at
making it clear. Don’t make this mistake.
It’s ok for them not to like you, but not ok for them not to
understand you.
Putting yourself in the investor’s shoes.
Investor: “Do I understand what they are trying to say?”
Remember that you are the expert in what you’re saying. Your mind will fill
in the blanks if your words are unclear. But the investor can’t. As a form of
practice, some people say to try explaining your business to your parents. I’m
not taking any responsibility if you try this.
Pitching A Leap of Faith | © Raymond Luk 2021 9
I know you believe every pixel on your pitch deck. But assume your reader
is skeptical. Good investors are. When you say the market is a billion dollars,
you’d better back it up. Saying, “if we only get 1% of this market, we’ll be a
billion-dollar company,” is not believable. Neither is “there’s no competition,”
or “this market is ripe for disruption, ” or “we’re first to market.” Find someone
skeptical to review your work. Someone not afraid to tell you what you don’t
want to hear. E.g., your parents.
Tip: When you ask a friend or advisor for feedback, don’t
just look for positive affirmation. Ask for specifics: “How
does my problem slide rate on a scale of 1 to 5? What do
you not like about how I describe the market? Pretend
you’re a skeptical investor and pick 3 things you don’t
believe on my financials.”
Investor: Is the story believable?
This is probably the number one thing entrepreneurs overlook. Investors are
mostly investing in you, i.e. the jockey not the horse. From this perspective
your entire pitch deck is a way to evaluate your talent, intelligence and ability
to execute.
Yes, your financial projections are based entirely on assumptions. You
know that and they know that. So why bother? Because it establishes your
personal credibility. Those assumptions reveal how you think.
This is why, except for copywriting and design, you should never outsource
developing your pitch deck to a consultant.
Investor: Is the entrepreneur credible?
Pitching A Leap of Faith | © Raymond Luk 2021 10
There are a lot of blog posts on the proper order of your slides. Don’t read
those. You can tinker with this later. A good slide deck should flow like a
movie trailer:
This slide ordering is a good starting point:
1. Intro slide - your elevator pitch
2. Problem - an analysis of the problem you solve
3. Solution - an analysis of how you solve that problem
4. Why now - proof now is the time (not later)
5. Traction - what you’ve done so far
6. Market size - what your market is, how big it is
7. Product - the unique features of your product that solve the
problem
8. Team - why your team is the best to do it
9. Business model - your engine for making money
10. Go to market - how you get to your customers
11. Competition - who else is doing this, what alternatives are
12. Financials - how your business makes money
13. Ask / use of proceeds - how much do you want and why?
Whatever order you choose you absolutely must have one of each of the
above slides. Try taking even one out and the entire story falls apart.
In a world full of danger (the problem) but also great beauty
(the market), a ragtag group of rebels (your team) faces
insurmountable odds (competition) in the hope of a better
future (financials). Will they succeed (the ask)?
The order of your slides.
Pitching A Leap of Faith | © Raymond Luk 2021 11
Do not start at slide one and create each slide in the order they’re presented.
There is a better way to do it that builds your pitch deck from the ground up.
Divide the slides into sections, then group related slides together. Each
section has a goal you’re trying to achieve and a self-assessment at the end.
Don’t move on until you’re satisfied with each section. Below, I’ve divided
my slides into 6 sections.
Doing it this way builds a strong foundation of your story and forces you to
think about how an investor hears the whole story, not just one slide. The
“big three” sections cover the problem, the market opportunity and how you
intend to make money. The other sections are about you: why are you the
best person to execute this vision, and what have you done so far?
Describing the need for your product in way that captures the imagination and makes the investor think: the world needs this!
Proving the market is big enough and ready enough to create a space to build a successful company.
Creating a business model and plan to go to market that makes money.
Assessment: have you made the investor feel the pain you’re solving?
Assessment: have you proven there is a big opportunity and the time is now?
Assessment: is your plan to make money exciting, but believable?
The order you should make your slides.
1 Deep Dive on the Problem
2 Selling the Market Opportunity
3 Making Money
Problem
Slides
Slides
Slides
Solution Product
Market Why Now? Competition
Business Model
Go toMarket Financials The Ask
Pitching A Leap of Faith | © Raymond Luk 2021 12
Showing you have the right team to build this company and showing off your early traction.
Assessment: have you shown why you are the best team to capture this opportunity?
Assessment: does your traction show you have momentum?
Assessment: do you have an elevator pitch that is simple and exciting?
4 Proof Points
Let’s dig into each section...
Slides
Team Traction Intro
Deep dive on the problem
CHAPTER01
Pitching A Leap of Faith | © Raymond Luk 2021 14
CHAPTER ONE 01Deep dive on the problemSlides: Problem, Solution, Product
Examples of “who” statements:
The problem
A lot of pitch decks gloss over the problem statement. But if the reader
doesn’t believe the problem there is no point for them to continue. So what
is a compelling problem and how do you put that into a slide?
Start with who.
Who has this problem? The more specific you can be the more compelling,
i.e. painful, the pain point will be like vitamins vs painkillers. Vitamins are
great for maintaining good health, but no one has to take them. Whereas
people who suffer from pain have to take a painkiller. And they need to do it
right now. You want that sense of urgency.. Now describe who has the pain.
Below is a table outlining how sharp you can make your ‘who.’
Bad Better Best
Businesses... Medium-size businesses over 500 employees...
North American manufacturing businesses between 500-1000 employees.
People... Urban condo residents in major cities...
Young parents who cannot afford a detached home and who are raising their first child in a condo.
You cannot have a problem statement without describing who has the
problem
Pitching A Leap of Faith | © Raymond Luk 2021 15
What is the problem?Now that we know who has the problem, we can move onto describing
the problem itself. Do not, I’m seriously begging you, define your problem
statement as a lack of your product:
See how I cleverly inserted my product in there? Now logically the solution
is...VitaPoet! We’re not ready to talk about your product in the story, yet.
I find the Value Proposition Canvas by BMI a good place to start and a great
resource all around. I’ll summarize two key concepts: pains and gains. Your
problem will address one and probably both.
The existence of those pains or lack of those gains causes the dissatisfaction
that your product satisfies.
People don’t have access to a wifi-enabled juicer that can also read poetry.
Defining pains and gains:
Pains are things your customers avoid Gains are things your customers desire
Obstacles to achieving something: ■ “I can’t find what I’m looking for” (search cost
obstacle) ■ “It’s too expensive” (price obstacle) ■ “They don’t make shoes to fit my foot size/shape”
(feature obstacle).
Things they want but don’t have yet, or don’t have enough of:
■ I want to make more money ■ reduce expenses ■ get better insights from my data ■ find more customers.
Emotional pains. This could be fear of missing out, feeling overwhelmed with choice, or risk of failure.
Less tangible desires like “feeling aligned with the values of the companies I buy from.”
Can you talk for 30 minutes about the problem you’re trying to solve without mentioning your product?
Pitching A Leap of Faith | © Raymond Luk 2021 16
Pains and gains are not hypothetical, they’re currently being experienced by
your target customers. This means you should be able to describe them in
detail. It’s a red flag if you can’t.
Politicians know how to do this. You’ve probably heard a variation of this: “I
think of little Billy B. from Whitby, Ontario whose parents lost their jobs when
the local car plant closed down. They’re struggling to buy school supplies
for their son…”
Make your problem vivid and believable. Do it for Billy.
Examples of problem statements:
Bad Better Best
Kids give up on learning music because it’s too hard.
High school kids lack easy access to music instruction and group practice outside of the classroom. It’s too expensive, time consuming and not fun.
We did a survey of 500 high school kids enrolled in music class as well as their teachers and parents. 80% wanted more opportunities to learn and play music but could not find any resources, or could not afford private tutors.
Air travel is incredibly frustrating. Flying through large airport hubs keeps costs down for airlines but is fundamentally inefficient. You can’t fly where you want to go directly.
There are over 14,000 private runways in the US, which sit unused 99.9% of the time. Flying through regional airport hubs increases travel time, wastes fuel and increases traffic congestion for communities within one hour of major airports.
Self evaluation: Does your problem statement paint
a vivid picture of what it is and who experiences it?
Do you give the impression that you could spend all
day talking about this pain?
Pitching A Leap of Faith | © Raymond Luk 2021 17
What is The Solution?Do not fall into the trap of putting screenshots or product diagrams on the
Solution slide. Why? Because just staring at a glossy photo of your product
does not make it obvious how you solve the problem. No matter how much
you want to show off your MVP, be patient. We’re not there yet in your story.
Before getting into specific products and services start with answering how
you address the pains and gains. What is your perspective on solving the
problem? Eg if your product is a mobile app I’m assuming your solution has
something to do with integrating into a user’s existing routines.
Example: mobile app for runners
Customer experience before your solution
Customer experience after your solution
PAIN: I’m not training properly, missing my race goals and eventually give up
PAIN SOLVED: I have custom training programs based on sports science and data collection.
GAIN: I want to run faster, stay motivated, and meet other runners
VALUE GAINED: I run with an encouraging community, have friendly competition, and improved my running speed.
So far we’ve only described features in general. A lot of entrepreneurs get
hung up describing specific features of their product as the solution to the
problem. To avoid that, use the Easy Button approach:
Your solution should match the problem, regardless of what form your
product takes. In the running app example above, we’re proposing a
solution to runners overtraining by delivering data-driven custom training
feedback. Does that make sense as a solution? If runners could hit a big red
button and get that solution, would they want it? The answer should be yes!
This is sometimes called problem-solution fit in Lean Startup jargon. It
means you’ve developed a convincing solution to a problem before
validating whether specific product features are viable.
If you replaced your product with an Easy Button is it still a convincing solution to the problem?
Self-evaluation: does your Solution slide show good problem-
solution fit vs listing product features? Would the reader be
convinced even if the product was an Easy Button?
Your customers problems
Your solution
Running App
Real-time audio feedback
Artificial intelligence Coach
How your app solves overtraining problem
Pitching A Leap of Faith | © Raymond Luk 2021 19
ProductYou’ve finally arrived at a point where you can describe your product or
service! Most entrepreneurs are pretty good at this.
But wait. I still don’t think you should just have screenshots or photos of your
product or a demo. Why? Because how your product solves the problem is
often not captured in a visual of the product itself.
The diagram on the right is much better at highlighting how your product
uniquely solves the problem. Even if you include a screenshot it will
probably be a small part of the overall impact.
Comparison of product slide designs:
Pitching A Leap of Faith | © Raymond Luk 2021 20
Depending on your business, you may have one product slide or several. If
it’s something novel or highly technical, you can spend more time educating
the reader. But don’t overdo it. As a rule, only show on a slide what
specifically addresses the problem-solution fit. Don’t show anything that any
reasonable person would expect from a product like yours. Focus only on
what’s unique.
It’s not about hiding your product; investors want to see it! It’s about making
sure your images tell your unique story.
Many entrepreneurs include a roadmap for their product. Where can it grow
into? How much bigger can it be? This is good to include, but you do not
need to include your entire product development roadmap. That can be one
of your “back pocket” slides.
Your roadmap should plant the seed in the investor’s mind that your product
can become even bigger and better in the future. They can find out in the
second meeting.
Tips for your product visuals:
Don’t Do
Screenshot of a credit card payment form Screenshot of 1-click ordering button
Picture of a POS system Picture/animation of how your contactless payments work
Picture of your vegan leather wallet Highlight features like greater durability, the ability to make more interesting designs, and a cruelty-free logo
Self-valuation: does my product slide directly tie
back to the Problem and Solutions slides? Does it
show how my product creates value, i.e. solves the
problem? Are any of my visuals redundant?
Pitching A Leap of Faith | © Raymond Luk 2021 21
Chapter One Checklist:
Can the reader close her eyes and see and feel the
problem you’re describing? I.e. is it real?
Have you focused as much on who has the problem as
what the problem is?
Do you describe a solution that does not mention your
product features?
Does your product slide clearly tie back into the problem
and solution?
Do your product visuals highlight how your product
solves the problem, or do they just show off features?
Explain the market opportunity
CHAPTER02
Pitching A Leap of Faith | © Raymond Luk 2021 23
CHAPTER TWO 02Explain the market opportunitySlides: Market, Why Now, Competition
You’ve identified a problem worth solving, and you’ve found a solution that
fits. You’ve described a product that is the next best thing to an Easy Button.
The Market, Why Now, and Competition slides are where you get investors
excited about how big and exciting the market opportunity is.
This is the most difficult section of a pitch deck and particularly challenging
for early stage companies. Why? Because on the one hand, you want
precise numbers to be credible. On the other hand, you’re trying to create a
new market, or redefine an existing one, rather than being a late entrant in a
mature space. You’re not going to find much published research on a market
you create.
There needs to be demand for your product. Otherwise you’ll have no
revenue. How much revenue your investors want is based on the type of
funding you’re after.
There’s gold in them thar hills.- Yosemite Sam
Pitching A Leap of Faith | © Raymond Luk 2021 24
A venture capital firm wants to eventually see huge revenues, so your
company is worth a huge amount, and they can generate returns minus all
the companies they invest in that don’t work out. That’s why VCs need to be
convinced your market is not only big; it’s huge.
Angel investors would love a massive exit, but they don’t have the same
pressure as a VC fund. They’re investing out of their own money and not
competing with other Angels in the sense of needing to generate a specific
rate of return..
A bank or a lender doesn’t want an exit at all. They make the most money by
receiving a regular stream of interest from you over the long term.
You should always find a big market for your business. That’s a good
business strategy. How big the market has to be in your pitch deck depends
on the type of funder you’re pitching.
Pitching A Leap of Faith | © Raymond Luk 2021 25
Market Size
No one likes estimating the size of their market. Stop thinking there’s an
entrepreneur out there who’s better than you because they love market
sizing. It’s stressful walking the tightrope of too big and not believable vs. too
small, but reasonable.
My advice? Always do a bottom-up analysis. This will take way more time
but will help you avoid:
■ Quoting high-level numbers that have nothing to do with your specific business. E.g.
“Internet usage is growing 10% per year” or “The enterprise software market is a $50
billion dollar a year industry” or “every night, 70% of human beings eat dinner.”
■ Showing a graph or a quote from a 3rd party source unless you’ve read the report and
are an expert at its findings. You don’t want a well-placed investor dart to land on this
slide and pop your entire pitch deck balloon.
■ Not being able to react when investors poke holes through your market size analysis.
Poking holes in market sizing is an Olympic sport.
So get comfortable making big assumptions that other people may not
agree with. At least you’ll be able to explain how you got there. It will be your
market, not someone else’s. Here is how to get started:
1. Segment your market. On the Problem slide at the beginning, we already described
(right?) who your customer is and isn’t. You should write down the key characteristics
of your customers, e.g. consumer vs business, location, size, demographics, age.
2. Look for high- level stats from government sources (US Census Bureau, Statistics
Canada, etc), 3rd party research and anything credible you can find on Google. You
won’t find everything in one place, so don’t try. You’re collecting bits and pieces of
information that you’ll stitch together later.
3. Make some assumptions. Only have US statistics? Divide by 10 for Canada and
multiply by 3 for the entire world. Suppose 90% of businesses have no employees
(because they’re sole proprietors or shell companies) and 20% of businesses are in
your sector.In that case, your target market is 18% of whatever number you find for the
total number of businesses.
Pitching A Leap of Faith | © Raymond Luk 2021 26
4. Make some more assumptions. What % of the market do you think has the biggest pain
and will be most open to your product? What % is least served by other competitors?
What % do you think you can reach initially? These are all assumptions, but now you
are truly getting to a market size that reflects how you see the world. Don’t be surprised
if your assumptions lead you to a place you don’t like, e.g. a market that’s too small. Go
back and iterate but be careful you don’t end up describing a world you don’t believe
in.
You might feel that your bottom up analysis is not as good as some research
analysts. You’re probably right. But there isn’t an analyst covering your
space anyways, and if they are, you have to be sure they define your market
segment the same way you do.
For the rest of your pitch deck, the goal is to be detailed and credible. A great
way to establish credibility is to push back on the investor’s push back. Has
an investor thrown out a statistic they read about your space? You’ll be able
to question their numbers by walking them through how you got to yours.
Pitching A Leap of Faith | © Raymond Luk 2021 27
If you don’t know what TAM/SAM/SOM means, read this article. There is an
entire cottage industry explaining this concept, and I’m covering it in this
guide only because it’s become a de-facto standard
■ TAM = total addressable market. This is the total amount of revenue that can be earned
in a product category for a market. This is not your market. It’s the bigger market your
product exists in, eg “all restaurants.”
■ SAM = serviceable available market. Unless you’re a monopoly, in which case stop
reading this guide, you will never capture the TAM. SAM carves up TAM into smaller
chunks, e.g. geographies, e.g. “all restaurants in North America.” This is still a theoretical
market size that you cannot achieve, at least not in a reasonable timeframe.
■ SOM = serviceable obtainable market. This is the actual market you can capture based
on factors like your financial resources and competition. Think of it like your eventual
market share if you are successful.
A lot of people mistakenly think that a big TAM shows there is a huge
opportunity. This isn’t true because TAM is not achievable. If you want
to show there is a big market opportunity, focus on showing there is a
big enough SAM for you to grow your SOM. If there is a crowded market,
what you can realistically achieve (i.e. your SOM) will be smaller due to
competition. See why these acronyms are confusing?
TAM/SAM/SOM, or for the love of acronyms
Pitching A Leap of Faith | © Raymond Luk 2021 28
Comparing good vs bad approaches to TAM/SAM/SOM:
All animals
Cost of wildlife
damage to N.
American homes
Urban
Pests
All non-lethal
deterrents
RaccoonsAnti- wildlife
sprinkler market
In the above example you don’t need numbers to see that what’s on the left
is unconvincing. “All animals” is too big and vague a market (even though
there are a lot of them). “Urban pests” is also a big number but too broad.
By the time you get to your SOM, the user still has a lot of questions about
raccoons.
Pitching A Leap of Faith | © Raymond Luk 2021 29
The TAM on the right is better because it defines how much people spend
repairing wildlife damage in total. Of that, some people resort to lethal means
(no comment) and within the SAM are wildlife removal services and other
alternatives. The SOM for your anti-wildlife sprinkler system now makes
much more sense. Even if you defined it bottom- up, it’s tangible.
Self-assessment: can you describe in detail how
you arrived at your market size? Is the market big
enough that you can realistically grow into the
business you’ll be projecting later on the Financials
slide?
Pitching A Leap of Faith | © Raymond Luk 2021 30
Why Now?Markets are not static. If they were, there would be no disruption and no
startups. The Why Now slide is your chance to explain what is changing.
Here are some examples:
■ Demographic changes like longer life expectancy or people having children at a later
age
■ Technological changes like the advancement of artificial intelligence
■ Societal changes like mass adoption of remote working
■ Regulatory changes like increasingly strict data privacy laws
Of course, the most obvious ‘Why Now’ is quoting someone else saying, “the
market for X is growing 20% per year.” That seems to be the gold standard,
and I see it in most pitch decks.
Try to avoid using 3rd party quotes like this because they’re often not exactly
the market you’re targeting. And you want to show how your product is
changing or disrupting your market (or creating a new one), not entering an
already crowded market.
Overall it’s best to describe what’s changing, i.e. Why Now? In terms of
changing customer pains/gains and other high-level changes in consumer
or business behaviour. This is an easier way to make the investor feel FOMO
than quoting an analyst.
Your Why Now slide should look like this and, often combining this with your
Market slide makes it even better:
Pitching A Leap of Faith | © Raymond Luk 2021 31
Example of how to demonstrate “Why Now?”:
This captures the imagination much more than just saying the market is
growing.
Don’t just say demand is growing for your product. Explain the fac-
tors driving that demand.
Self assessment: does your Why Now slide describe
what pains/gains or market conditions are changing
to create the opportunity now?
More raccoons due to
increased urban density
Increasing demand for
wildlife-friendly solutions
New sensor and AI tech
Pitching A Leap of Faith | © Raymond Luk 2021 32
CompetitionThis is second only to the market size slide as the place where pitch decks
go to die. There is probably a psychological basis for entrepreneurs not
wanting to find competitors because it’s too painful. Most parents think their
children are the most beautiful. Few go looking to disprove it.
The number one thing people forget is that the point of the competition slide
is to establish credibility, i.e. your credibility. What’s on this slide (and what’s
left out) tells the investor a lot about you:
■ Have you done your due diligence? I.e. if you haven’t been diligent about finding
competitors, what else are you not being diligent about?
■ Can you explain why you chose certain criteria to compare with your competitors?
Why do those matter?
■ Are you being honest about how you stack up?
Saying there is no competition is saying there is no market, or
there is one you just don’t know about it
Being “first to market” is seldom true, and it only takes one counter-
example to deflate your argument. There are usually better
competitive advantages.
Pitching A Leap of Faith | © Raymond Luk 2021 33
Here are the two classic templates for competitive analysis:
Otherwise known as More is Better, this table compares features letting
the investor draw the obvious conclusion that more checkboxes is better.
Avoid using this for your competition slide because:
■ Features are easy to copy and are not strong competitive advantages
■ The features you list may not be important
■ You’re probably leaving out features competitors have that you don’t
■ You’re implying that it’s a crowded market when the rest of your pitch deck should be
saying your product is new and innovative
Easily
copied
feature
ThemThem
You
Feature
no one
wants
Feature
no one
wants
Pitching A Leap of Faith | © Raymond Luk 2021 34
The other classic competition slide looks like this:
Better product
Stuff they have less of
Worse product
Stuff we have more
of
I call this the Lonely Logo Matrix because you will do anything to make
sure yours is the only logo occupying the top right-hand corner.
The 2-axis map can work if the axes describe criteria that matter and get to
the heart of your problem-solution fit. A good way to format this slide would
be to use half of the slide for this graphic and the other half explaining why
you chose those criteria. I see this in 1% of pitch decks, and they really stand
out for how convincing they are.
Before copying and pasting that logo in the top right, try this self-evaluation
of your competitive criteria:
Evaluating your competitive criteria:
It matters because...Competitors can’t do the
same thing because...
X-Axis Criteria list three reasons list three reasons
Y-Axis Criteria list three reasons list three reasons
Pitching A Leap of Faith | © Raymond Luk 2021 35
Good vs bad competitive advantages:
Bad Good
Features - they’re easy to copy Proprietary IP e.g. we own the patent on this drug
Price A business model e.g. freemium - the competition would cannibalize their market if they did this
Brand Values e.g. we exist to provide tools for women entrepreneurs
Establish competitive advantage
Finally, make sure your competitive analysis establishes some advantage,
not just a difference. Spend some time thinking about things you do that are
difficult to copy or counter.
Self-assessment: have you proven why your
competitive criteria matter? Have you shown
how you have advantages your competitors can’t
duplicate?
Pitching A Leap of Faith | © Raymond Luk 2021 36
Chapter Two Checklist:
Have you done a bottom- up market sizing that you can
explain in detail to an investor?
If you use external sources, are you sure they describe
your specific market and not some big but unrelated
market?
Did you describe things that are changing that create
an opportunity for your product? Not just “demand is
growing by X%?”
Can you explain in depth why you chose certain criteria
to compare yourself with your competitors?
How much time did you spend looking for competitors?
Have you listed competitive advantages that are
convincing?
How do we make money?
CHAPTER03
Pitching A Leap of Faith | © Raymond Luk 2021 38
CHAPTER THREE 03How do we make money?Slides: Business Model, Go To Market, Financials, The Ask
The Business Model, Go To Market, Financials and Ask slides are all about
describing the engine at the core of your business that, eventually, creates a
growing, profitable business.
Most pitch decks I see really miss the mark. We see a lot of random numbers
that are not connected to the rest of the business strategy. If you are an early-
stage company, assume that your reader understands that not everything
will work out exactly as you project. But that doesn’t mean they don’t want
you to convince them that you’ve thought things through.
At some point, perhaps at this exact moment, you’ll feel annoyed that
investors are looking at your financials as if you have a crystal ball. You might
be thinking, “do they want me to lie to them and tell them my projections are
100% accurate?”
As your business grows, the expectation is obviously that you’ll have better
data and more accurate predictions. But at the early stages, you’re being
asked to be diligent with your business model, so the investor feels you’ll be
diligent with their money.
Pitching A Leap of Faith | © Raymond Luk 2021 39
Business Model SlideThis is not your pricing. This is where you describe how you intend to sell
and how it eventually makes money.
■ Will you sell direct or indirect or both?
■ One-time or recurring revenue?
■ Products or services or both?
■ Freemium? SaaS? Ad-driven?
First, make sure you explain why this is the ideal business model for your
business. Every business model will have different components, but yours
should have at least these:
■ How you acquire customers (which you’ll go into more detail on the Go To Market
slide)
■ What pricing model you’ll use, and your initial price point
■ High-level assumptions, or actual data, on unit economics, i.e. the costs to service that
client (manufacturing, inventory, salaries for service staff, technology platform costs,
etc)
■ What improves as the business scales e.g.. manufacturing costs fall as volumes
increase, improving unit economics.
The ideal slide is a diagram showing a flywheel effect, i.e. how your business
gains momentum and starts spinning with less and less energy (i.e. money)
required. You can achieve this in different ways:
■ Network effects or virality in your business (more users attract more users)
■ Economies of scale (things get cheaper as you grow)
■ New technologies (breakthroughs allow you to do things you couldn’t do before or
automate costly processes)
■ Perceived market leadership (people try you first because they think you’re #1)
Lower acquisition costs
Higher margins
Increasing usage
How you acquire customers
direct sales
marketing
partnerships
Pitching A Leap of Faith | © Raymond Luk 2021 40
An example of a business model slide showing a flywheel effect:
Your slide will have actual numbers or estimates if you don’t have actuals
yet. Your flywheel doesn’t need to be the perfect perpetual motion machine.
Focus the investor’s attention on the one or two unique things about your
business model and how you’ll make money.
If you’re struggling with this slide, pick a competitor
and try building this slide as if you were analyzing
their business.
Yourplatform
The
Market
Pitching A Leap of Faith | © Raymond Luk 2021 41
Go to MarketA surprising number of pitch decks omit this slide. That’s a mistake because
after you’ve found a great market and built a great product, you still need
to say how you’ll get the two together. If you build a better mousetrap, will
customers beat a path to your door?
This slide is an extension of your business model slide, which shows how all
the parts of the engine work together to make a profitable business. The Go-
To-Market slide focuses on channels. That is, sales and marketing channels
for how customers learn about you and decide to buy, plus distribution
channels for how your product actually gets delivered.
Many entrepreneurs struggle with this slide because they haven’t spent
much time figuring out a Go To Market strategy. They don’t know exactly
what channels they’ll use, and they don’t know enough about the costs of
each.
■ Digital marketing - if this is one of your channels, you need information on advertising
costs and conversion rates leading to your customer acquisition cost (CAC).
■ Direct sales - there are decent metrics out there about the potential revenue one
salesperson can bring, e.g. 4-5x base salary per year.
■ Channel partners - how much margin do channels take? How much do you need to
invest in these channels?
Pitching A Leap of Faith | © Raymond Luk 2021 42
Once your channels are established, you should build up a timeline that
shows what go- to- market tactics you’ll do at what time, including marketing
tactics, new product launches, strategic partnerships, etc. Like your product
roadmap, this shouldn’t be a detailed project plan. Just show the big things
you’ll do, like expanding to a new country or launching a new integration.
These inflection points will drive changes to your financials, like increasing
revenue.
Besides building confidence that you’ve done your homework, the investor
also wants to check that you have the funding in place to execute this plan.
Most people underestimate the costs of getting to market and getting the
volumes of business they are projecting. Don’t make this mistake. It’s ok that
you can only afford one or two channels initially, but show that you can
expand to others.
Pitching A Leap of Faith | © Raymond Luk 2021 43
The FinancialsThe reason I wear glasses now is because of years staring at tiny numbers
copy and pasted from Excel into the Financials slide.
There are 5 things your Financials slide should do; the rest can be in that
giant Excel file you or your CFO lovingly crafted.
1. Quickly summarize the past. Unless you literally started your business last night, you
need to show a history of any funding, expenses and revenue. When are you running
out of money?
2. Show expenses that match your business model and go to market. Expenses should
correspond to the main cost drivers of your business model: e.g. software development
or manufacturing or advertising. Don’t just put “salaries.”
3. Show revenue growth that follows from your business model and go- to- market
strategy, e.g. when do you start seeing the impact of investments in your marketing or
have new product launches?
4. Show the size of your losses / negative cash flow. This equals your need for funding.
Show what the new funding does, e.g. gets you to breakeven or a growth milestone to
raise more money.
5. Don’t show monthly or quarterly projections; it’s too much detail. Annual is enough
unless you’re about to hit an inflection point (like breakeven) within 12 months.
Idea: create a plugin for Powerpoint that disables pasting from Excel.
Expected outcome: many more startups get funded.
Pitching A Leap of Faith | © Raymond Luk 2021 44
The AskThere is no reason not to have an Ask slide in your pitch deck - even if you’re
doing “informational” pitches. The Ask is the whole point of the pitch deck.
The number on this slide should say, “this is what we need to achieve our
vision and build something huge.” The amount you’re asking is an important
signal itself. If you’ve painted a huge vision and showed great traction but
you’re under-asking, the investor will wonder why. If you’re asking way too
much you’ll leave the impression that only throwing lots of money at the
problem will solve it.
If you’ve done the work on all the other slides in the deck, then:
■ The amount you’re asking should be related to ballpark losses / negative cash
flow you need to fund to reach our next milestone. Don’t just say “$500,000”
because that’s what you heard a pre-seed round is these days. I’m not saying to
ask for the minimum.
■ For the use of proceeds, avoid generalities like “salaries” or “working capital.”
List the top 3-4 things (that were already established on previous slides) that
you need to do with this funding. The use of proceeds should buy a result.
A lot of entrepreneurs ask if they should state details like their valuation
in their deck. My advice is to state your valuation if you have a funding
round in progress. Why not? Otherwise, I would leave it out because it’s not
necessary for your story. If they’re asking you for your valuation, you’ve done
something right.
Pitching A Leap of Faith | © Raymond Luk 2021 45
Chapter Three Checklist:
Does your Business Model slide show how you make
and spend money, or is it just your pricing or revenue
model?
Does your Go to Market slide show the costs of using
different channels, even if they’re assumptions?
Have you summarized your financial history in your
Financials, so the investor knows where you are
currently?
Do your Financials show changes like increasing
sales and increasing or decreasing expenses based
on inflection points in your product or go- to-market
strategy?
CHAPTER04Proof points
Pitching A Leap of Faith | © Raymond Luk 2021 47
CHAPTER FOUR 04Why You?Slide: Team
Pretend you are an investor. Now pretend you were pitched your idea by not
one but three different teams (your worst nightmare). Assume they are all
just as competent as you.
This is the right mind frame for your Team slide, aka Why You?
Reid Hoffman did you a huge favour by inventing LinkedIn, so you do not
need to put your entire CV on this slide. Put a headshot (do not think about
not having your photo) and a link to your LinkedIn page.
Then focus everything else on why you and your team are better than those
other teams pitching the same idea. PhD in your field? Check. Worked as
a commercial pilot for ten years before coming up with this drone idea?
Check. You’re a level 90 Druid in WoW, so you know all about virtual
currencies and the need for an exchange? Mention that!
I’m definitely not saying that you need fancy credentials or decades of
experience to be successful as an entrepreneur. I started my first software
company right after graduating with a degree in Classical Music (a fact that
has appeared in my pitch decks, never). Anyone can start a company and be
successful, which is how innovation happens.
Name, Role
• Relevant skill • Unique experience
• Useful track record
Combined
Expertise
Superpower 1
Name, Role
• Relevant skill • Unique experience
• Useful track record
Name, Role
• Relevant skill • Unique experience• Useful track record
Superpower 2
Superpower 3
Our team
Pitching A Leap of Faith | © Raymond Luk 2021 48
But you still need to answer Why You? You can do that by listing unique
experiences, credentials, and even your passion for this space. Unlike some
people, I think listing key Advisors can give this page a boost as long as
they’re credible.
I think the ideal Team slide has two or three short bullet point bios of your
key team members - the same for two or three key advisors. Then a couple
of summary statements about the “superpowers” of this team.
Example Team slide layout:
Do not list every person on your team or include
all their bios. Just mention what they contribute
to your team, eg “2 engineers with supply chain
experience.”
Pitching A Leap of Faith | © Raymond Luk 2021 49
TractionSlide: Traction
If your pitch deck is how you ask an investor to take a leap of faith, then the
Traction slide shows everything you’ve done to minimize the gap you’re
jumping over, e.g. by getting a running start. Some people begin with
the traction slide if they have metrics that will grab an investor’s attention.
Other people think it’s jarring to start with proof points before you’ve even
explained what you do. Sometimes it’s the ‘wow’ factor you need at the end
of the pitch.
I like to put Traction after Why Now but before all the numbers on the Market
slide. If you’ve gotten their attention with your problem, solution and the
urgency, then this slide says ,“Look, we’re already making great progress.”
What counts as relevant traction? Only what proves that the assumptions
of your business model are true. Revenue may not be relevant depending
on how it’s earned, e.g. a one-off contract vs a repeatable client. User
engagement is usually top of the list. What shows that your users love your
product, can’t live without it and are willing to pay? If you are a science-
based company, research and development milestones show traction.
Traction means “grip,”e.g. a tire on a road. Instead of thinking about the
biggest numbers you can find, use numbers that show your product is
starting to achieve grip with your customers and market. Grip is what starts
to turn the flywheel.
The earlier your business, the more that traction is a story, not a spreadsheet.
But if it’s a story based on real data, it’s just as compelling.
Pitching A Leap of Faith | © Raymond Luk 2021 50
The IntroSlide: Intro or Title Page
This is also known as “we’re waiting for the partner to join so we might
as well look at something useful.” If your pitch deck is being read, not
presented (like on Hockeystick), this is actually an important slide. Your
reader may be on her iPhone making a quick decision whether to keep
reading.
A lot of pitch decks waste the prime real estate on the first slide. Having
a giant logo, a fancy graphic and a tagline sure looks like the title page
of a slide deck. But who cares? There’s only an upside to using the first
impression to encapsulate what you do, where you are and what you’re
looking for. Don’t worry; you’ll have the rest of the pitch deck to tell your
story.
Pitching A Leap of Faith | © Raymond Luk 2021 51
Big
Logo
Logo
Company
Name
“We build the future, now.”
Logo, usually too big
Unnecessarily large hero image
Redundant company name Cryptic tagline
in big type
Protecting homes from wildlife damage
using non-lethal technology.
Tested in 1500 homes, partnership with
5 major landscaping firms
How to build your title page:
Do not put a tagline on your title page or intro slide.
It’s confusing.
Raising $1.5M Series A
Huge
Image
Pitching A Leap of Faith | © Raymond Luk 2021 52
Chapter Four Checklist:
Does your Team slide answer the question: “Why You?”
Have you included a summary statement about what’s
so special about this team?
Does your Traction slide show you have a running start?
Have you chosen relevant metrics or milestones that
clearly show your business is starting to work?
Is there anything on this slide, like logos, that look good
but don’t show “grip” with your customers and market?
If so, remove them.
Is your title page useful, or just pretty?
Can the investor understand what you do on the first
page?
Pitching A Leap of Faith | © Raymond Luk 2021 53
Putting it all together.
You’ve built, or re-built, your pitch deck from the ground up. Your story is
detailed, compelling and coherent. You’ve given yourself the best chance at
capturing an investor’s attention and getting to yes.
You’re only a few steps away from first contact with real investors.
1. Take an honest look at your design. If you’re blessed with innate design skills or have
access to a designer on your team ,your deck is probably good enough. Don’t waste
time on aesthetics. But if your idea of design is sourced entirely from Powerpoint
templates, it’s time to get help. Get on Upwork or hire a freelancer. Don’t spend too
much, but don’t assume a smart investor can see through your ugly design. They can’t.
2. Write speaker notes. Most of this book has been about creating a pitch deck that can
stand alone without you being there. This is the best approach because you won’t be
there when they review the deck after you leave. But you can add life and colour to
your slides by emphasizing certain points or going deeper on a bullet. Get those ideas
down in your speaker notes. Then be prepared to improvise.
3. Practice in front of a hostile audience. You may think you are your own worst critic,
but nothing bulletproofs your pitch more than asking people to interrupt your flow,
question your assumptions and say they outright don’t believe you. You’ll probably
hear those words soon enough. Get a head start on how to respond.
This is the end of Pitching a Leap of Faith but just the beginning of
your fundraising journey. It’s a journey that doesn’t end with you
successfully raising money. Because as your business succeeds
and grows, you’ll soon be making another pitch, but for even higher
stakes. There are different strategies and tactics to raising larger
and larger amounts of funding. But at the core, the skill of pitching
is exactly the same. It will always be about convincing someone to
make a leap of faith.
Pitching A Leap of Faith | © Raymond Luk 2021 54
About the Author
Raymond Luk has been a serial entrepreneur and investor for the last twenty-
five years, focusing on innovations in entrepreneurial finance. He is the founder
of Flow Ventures, a financial advisory firm for startups. He pioneered the
venture co-creation model as co-founder of Year One Labs. His latest venture,
Hockeystick, is disrupting how small businesses are financed using data and
matchmaking technology. He lives in Toronto with his wife Elle who is a fashion
entrepreneur.
About
Hockeystick helps startups and small businesses raise the funds they need to
grow their business. Hockeystick eliminates the pain and stress of fundraising
by connecting companies with the right funding at the right time.
www.hockeystick.co