This is part eight of "The Ultimate Pitch Deck Guide for Startups," a fundraising guide made in partnership with DECKO, a leading pitch deck development company that’s helped ~180 startups raise over $100M from investors.
____________________
Now that investors understand How it Works, it’s time to show investors that it works. Your Traction is more than just a slide; it is perhaps the single best way to attract and retain investor attention.
Your Traction is proof that the plan you've put into place is working. It also tells a data-driven story around what you are pursuing next.
Investors use your Traction to assess whether your company is worth pursuing. Depending on their target industry, stage, and method of working with their portfolio companies, different investors will have different metrics that matter to them.
Your Traction slide shows investors what matters to you as a Founder and what Key Performance Indicators (KPIs) you spend your day-to-day improving. In this chapter of "The Ultimate Pitch Deck Guide for Startups," we’ll explore the three primary forms of Traction investors look for: Metrics, Logos, and Product Enhancements, along with how to convey them in your pitch deck.
Now, let’s dive in:
Metrics
Numbers don’t lie. Investors prefer to view Traction in the form of numbers because it allows them to accurately quantify and benchmark your company’s performance alongside its peers.
Some key metrics to provide in your Traction include: ARR/MRR (Annual/Monthly Recurring Revenue), Revenue, Monthly/Daily Active Users, CAC, LTV, Retention, and Margins. For definitions and examples of these metrics, take a look at Chapter 3: VC Vernacular (specifically “Important Metrics” and “Measuring Success”).
Each company, depending on its industry and stage, will have its own metrics that matter to them. For example, a social media platform may include User Growth along with Session Time, User-to-User Interactions, Posts per User, and more. Identify what metrics matter to your company and include them in your Traction slides.
In addition to providing your metrics, highlight how your metrics have evolved over time. More exciting than generating $2M in revenue is generating $2M in revenue at a 100% YoY growth rate. Similarly, a low CAC and high LTV is made even more exciting when you can see how CAC has lowered and LTV has increased over time.
Showing the history behind your metrics gives investors valuable insight into how your company's strategy is playing a role in your company’s overall performance.
When presenting these metrics in your deck, don’t be shy about the design. Make your numbers big and bold. Investors should not be able to miss them. If they're scrolling through your deck, these numbers should stop them in their tracks and capture their attention.
Logos
If you have exciting enterprise customers or large partners, be sure to include them in your deck. Logos, especially logos that belong to well-known companies, provide incredibly strong social proof that the market likes your product.
When including your logos, be sure to explain what your relationship is like with each of these companies. If they are enterprise customers, make a note of your Enterprise Customer: Revenue ratio. Investors want to know that your company has a well-diversified customer base and that no one customer has too much of a share of your company’s revenue. This will show investors that your revenue is not reliant on any one specific customer and, if they churn (which hopefully they never will), your company can continue to grow.
Separately, if these are large partners, provide a high-level explanation of how your partners work with you. Do they provide data, access to customers, or something else? Make sure to highlight this so investors can both understand what partnerships matter to you and what partners they can potentially connect you with post-investment in order to support your company.
You can expand on specific enterprise customer or partner relationships with case study slides, but be careful not to include too many case studies above the fold (you can always add more to your Appendix). Only include 1-3 case studies above the fold and ensure that the case studies you choose to include tie into a story about your larger company strategy.
Lastly, include quotes/ testimonials from your customers so investors can hear how effective your product/ offering is directly from the stakeholders that matter the most to them.
Product/ Offering Enhancements
Your product/ offering is the heart of your company. The main thing investors want to know about your product's traction is how it keeps your company remaining competitive.
If your company is built on intellectual property, include your patent filing status so investors can see that your company is protected. Additionally, if your product/ offering is bolstered by access to proprietary data, share information on how your dataset has expanded over time.
Lastly, new features you mention should always focus on their impact on your bottom line. Note how new product features improve KPIs like your Retention, Customer LTV, etc. This shows investors that you are constantly listening to your customers and innovating to keep them coming back.
–
By following these strategies, you can effectively convey your company's Traction to investors and increase your chances of securing the capital you’re seeking to thrive.
In chapter nine we learn how to explain your go-to-market strategy to investors.
