The tail end of 2022 and the onset of 2023 have been frustrating for founders trying to extract even an ounce of investor engagement. Apart from a few thriving sectors that can boast strong investor engagement (hello, generative AI), startups across less hyped industries are experiencing what can only be described as an “engagement drought”.

Over the past year, we’ve seen a steep 25 per cent decline in investor engagement and response rates. The time investors spent reviewing decks plunged to a record low in Q4 of 2022, averaging a paltry two minutes and 18 seconds, according to DocSend. 

Concurrently, global funding dipped by 53 per cent YoY in Q1, with Crunchbase reporting a downturn across every stage of fundraising. Yet, the volume of pitch decks being sent by founders surged by 30 per cent, intensifying the scramble for scarce investor attention. It’s getting tough out there.

So, where does it leave startups seeking funding in 2023? One thing is clear: to increase your investor outreach success rate and land meetings, your pitch deck game needs to be inventive. In this article, we’ll dig into how to do precisely that.

With our global experience aiding early startups and unicorns in their fundraising efforts, we have accumulated a list of fresh and increasingly more effective practices to captivate investor attention. Many disrupt the longstanding conventions of how pitch decks should be created, partly explaining their particular effectiveness in the current climate.

Ditch the traditional problem-solution narrative

The problem and solution slide has been the cornerstone of investor pitch decks’ opening since the dawn of venture capital. Its concept relies on a simple yet effective narrative formula:

First, there’s a problem with the industry, supported by stats; then, there’s a solution the business offers.

Unfortunately, just like anything overused, the problem-solution narrative started to lose its efficiency, making investors numb to this rife approach. In most cases we’ve come across, it feels so homogenous and formulaic that it makes investors yawn and close the presentation after 30 seconds.

So, what’s the alternative?

Your pitch deck must open differently to stand out from the crowd and get investors’ eyeballs. But it’s not just about standing out — your pitch must immediately communicate how bold and ambitious your idea is.

The best way to achieve those things is to open with a powerful mission statement. Start by stating your ultimate goal and work your way backwards to explain how you plan to accomplish it. 

Also Read: 3 key strategies to master the art of value proposition pitching

Another effective technique involves underscoring the pain’s severity and the market’s immense potential. In essence, commence your deck with the most enticing incentive imaginable to pull investors in and get them to keep reading.

Make your story super tight 

Investor attention is scarce, so your goal is to get your point across quickly. With teaser pitch decks, less is indeed more.

The goal of a pitch deck is not to inundate investors with every minor detail about your business or product — it’s to prompt investors to contact you.

Still, we find that every other company we work with dedicates three-four slides solely to their product features! No investor will wade through four pages of product details. Rather, highlight the key features that define your product’s value proposition (preferably quantifiable) on just one or two slides or provide a demo link.

Focus on what matters to investors — your market, traction, why now, etc. Strive to provide all the essential numbers and context without going into minutiae or digressing.

Think of it as speed-dating: you only have five minutes to stand out among the other 40+ participants and forge a connection. Your goal is to be intriguing enough to spark curiosity and motivate the person to exchange phone numbers, not to divulge every detail about your life. 

The same principle applies to investors. Hence, highlight the most appealing aspects of your idea and leave the details for the call. Go through your deck a few times, cutting out any fluff you spot until it is super sharp and light. On average, almost all the decks we receive see can — and should — be trimmed by at least 25-30 per cent.

Forget standard headings

The conventional approach recommends using Ycombinator or Sequoia pitch templates that have straightforward headings like Problem, Solution, Team, etc. However, in today’s fiercely competitive climate, where the challenge is to capture and retain dwindling investor interest, mimicking what everyone else does is the least effective strategy.

Your slide titles must tell a story. Every headline should convey a standalone message, and every slide should sell a standalone idea. Investors must be able to open your pitch on a random page, read just the headline, understand the core concept, and be drawn to learn more. 

Here’s an example of how you can turn a vague, uninspiring Market slide heading into an engaging one:

But don’t just throw a bunch of disconnected slides together in the hope they stick — connect them logically and make sure they feed into your core business narrative. 

Bring your traction upfront

In early startups’ pitch decks, we often see traction being relegated to the end of the pitch since the startup hasn’t gained much traction yet. That’s a big mistake. According to the Docs data, VCs spent 40 per cent more time on this section in 2022 compared to 2021. 

For both nascent and mature startups, traction is one of the most scrutinised sections in your pitch deck and can be a make-or-break factor for your fundraising success.

If you have any (literally any) significant strides, move those upfront and underscore the juiciest parts for investors to notice right away. Have some strong retention indicators, rapid growth, or positive customer reviews? Put those forward as early as possible.

Also Read: Pitch deck for dummies: A compilation of top tips and advice from the community

Don’t have any traction yet? There always are ways to come up with something. Speak to 10-20 early users and collect testimonials on how they’re experiencing the pain you’re trying to solve to show that you have validated your idea.

If possible, display your early partnerships, growing social media following, or patent applications. Show investors that things are happening, regardless of how early on. 

Evoke a sense of FOMO

The “Why now?” question has always been crucial. The correct answer helps founders instil the FOMO and the sense of urgency into investors’ minds and stimulate the raise. In the current climate, when investors are hesitant to hand out cash, and the investment checks for post-Seed companies are generally down in the dumps, having a convincing answer to why they should pull out their wallets now is more crucial than ever. 

There are numerous ways to explain why now is the best (or even the only) time to cement your company as a category leader and why the momentum is as strong as ever. You can talk about the emerging trends in the space and how your company dovetails them. You can emphasize the severity/ubiquity of the problem and the competitive landscape that is yet to catch up. 

A well-crafted “Why now?” slide can also enhance the appeal of products in more traditional sectors.

Take an example from our experience: we assisted a client who was developing a sales automation tool—a market that’s oversaturated and currently lacks investor enthusiasm. However, we successfully repositioned it as the first generative AI-powered copilot for sales teams, a proposition only recently feasible. This AI-centric narrative helped our client secure US$4 million in funding in just a few weeks.

Weave ESG factors into your narrative

Compliance with ESG (Environmental, Social, and Governance) factors can severely increase your appeal to certain funds immediately. Many funds have mandates to invest in ESG companies, so if your business goes on to have a significant social or environmental impact, make sure it reads in your pitch.

But don’t dedicate a separate slide to it — it usually ends up being too vague and on the nose. Rather, weave it into the overall story by adding simple but powerful statements that reflect your ESG focus, like “We’re on a mission to do XYZ,” or “we want to help X millions of people to do/be X,” etc. 

This subtle touch will help better position your company towards funds that are looking to invest in this type of company and increase your company’s attractiveness among investors. 

Be smart about showing your metrics 

When it comes to demonstrating numbers, most companies we’ve come across just focus on growth metrics. That’s not enough to wow investors anymore. 

Also Read: Pitching 101: Questions that VCs will ask you during a pitch session

What investors care to see is that there is a fit between you and the market. Depending on your stage, many effective ways exist to demonstrate this fit. 

Pre-Seed – Seed stage

When pre-revenue, focus on demonstrating to investors you have a Founder-market fit. Early on, the goal is to prove that you and your team are the right people to bring this venture to success. 

Show that you know your customer persona and their pain inside out. Prove that you know how to sell to them. The best way to do this is by showing your previous achievements and relevant experience in the vertical. 

Maybe you were a customer turned provider who felt the problem on their skin and found the best way to fix it. Or maybe, you were part of a successful venture in the same space before.

The key is to show deep expertise in the industry and evoke trust in the founder and team. 

Series A

If you have recently generated your first revenue, on top of founder-market fit, investors will expect to see early proof of product-market fit. Do your customers love the product? Do they stick with it? If yes, here is how you can demonstrate that:

• Customer retention > 90 per cent
• Growing MRR
• User testimonials

Series B+

If you have over a year of revenue history, show investors that your business model is super efficient in generating money and that you have a business model/channel-market fit.

At this stage, investors are looking for startups that are profitable, capital efficient, and generally don’t bleed money. To prove your business model is bringing or on the track to bring in decent profits, don’t say what you’re doing and why – show it’s working through the following metrics:

• LTV: CAC > 3x
• Payback time < 12-18 months, depending on your ACV
• Conversion rates
• Rule of 40
• Previously raised vs generated capital (if you generated more than you raised)
• Burn rate multiple

With product differentiation diminishing as companies grow more and more homogeneous, what sets winners apart is their team, strategy, and execution. Don’t talk about influencers, TikTok, and all that stuff — everyone is doing that. 

Better talk about the flywheels you’ve set in motion and your unique strategies for generating a competitive advantage — through networks, community, technology, or else. All this will help you cut through the noise in an increasingly crowded yet homogenised market and get the investor engagement your business deserves.

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