Pitch Decks and Business Plans
One of the frequent questions one of the frequent questions that we get is whether or not it is better to have a business plan or a pitch deck to provide to potential funding sources. Generally, if the individual entrepreneur is seeking a bank loan then a business plan is almost always going to be required. This is primarily due to the fact that the business plan needs to contain all the appropriate market research, industry research, as well as a three-year to five year financial model in order for a bank to make their decision. In most cases, and investors also going to want to see a full-scale business plan for the render an investment decision. As such, most entrepreneurs actually take to developing both a business plan as well as a pitch deck.
As it relates to the pitch deck, these are usually presentations that run 15 to 25 slides in length and provide a number of talking points that the individual entrepreneur can bring up during a presentation to an investor. These pitch decks are often distributed as standalone documents so that a potential funding source can review it on her own time as well. However, it should be noted that most pitch decks to contain language that allude to the fact that a business plan is available upon request. One of the things that is often not put into a pitch deck is highly technical information that is very proprietary. This is primarily due to the fact that most pitch decks do not have a nondisclosure agreement embedded with them. However, an entrepreneur can have any individual or organization sign a nondisclosure agreement before a pitch deck is distributed. In some cases, especially as it relates to companies that have very proprietary technology, a numbered
system will be used when issuing a pitch text to an individual that way that in the event that the pitch deck was missing was found on the Internet can be determined which individual lost the file.
This system of numbering can also be applied to a business plan. The system is often used in business plans that are specific for film productions as specific drafts are given to specific people.
Many people actually start with developing the pitch deck before they develop the full-scale business plan. In our experience it seems that it is much easier to actually develop the business plan first given that many of the talking points are actually extrapolated from the business planning document and then put into a PowerPoint presentation. Additionally, many of the images and financial charts that are developed in conjunction with the business plan are often embedded in the PowerPoint presentation. Generally, the financial model from the business plan is typically inserted towards the end of the PowerPoint presentation document. This allows for natural progression as it relates to describing the company, products and services will be provided, the size of the market, and ending with the anticipated financial results of the business over a three-year to five year timeframe.
One of the more significant issues that people do have when developing a pitch deck is inserting all the appropriate images into this presentation. A graphic design firm can be hired to provide both original and stock images that can be used in conjunction with a pitch deck presentation. It should be noted that many investors do not like to see a pitch deck that has a substantial amount of stock images within the document given that it sort of cheapens the look and feel. As such, a graphic design firm can provide unique images that are specific to the business. This substantially enhances the quality of the overall presentation and provides for a much more professional look. These images, if they are produced by a third-party graphic design firm, can also be embedded within the business plan where appropriate. One of the things that we have found over the years is that many people go overboard as it relates to the images that they use in conjunction
with both their business plan and PowerPoint presentation documents. Real important factor in any of this type of documentation is the anticipated financial results and how the business will reach profitability once a capital investment is made.
In closing, it is really up to the entrepreneur whether or not they include a pitch deck in conjunction with their business plan. If someone is looking to raise capital from an investor as it was necessary to have a pitch deck given that it is going to be provided to a number of different people in order to generate investment. If the entrepreneur is seeking a bank loan any pitch deck is not nearly as important unless the loan committee requested a formal presentation is made in front of them before dispersing any debt funds.