Creating a well-made Investor Pitch Deck is one of the most important steps you must take on your startup fundraising process. It’s the best way to present your business idea to investors and convince them it will revolutionize the market and bring value to your customers. For a detailed explanation of the successful startup fundraising process coming straight from experts, you can download Vestbee’s ebook: Perfect Pitch - The Ultimate Startup Guide. And to discover more VC funds, check out our VC list - a complex database of the best early-stage venture capital funds investing in innovative startups across different verticals. Read More.
In this series we are diving deep into the ins and outs of the particular slides in the Pitch Deck - from the team slide and the ask slide, to the main contents: problem, solution and product. Now, it’s time to zoom out and explore the surrounding of your business. The crucial next step is to prepare a compelling market slide.
So without further ado, here are useful tips for creating a perfect market slide in your Investor Pitch Deck.
What is a Market Slide in The Startup Pitch Deck For Investors?
The market slide should follow the solution slide and include all the information about the audience your startup caters to. It should demonstrate your deep understanding of the market, its size, structure, geography, and demographics.
What To Include In Your Market Slide in The Startup Pitch Deck For Investors?
Your market slide should demonstrate a deep understanding of the audience your product caters to. Consider addressing the following aspects to create a comprehensive slide:
- Identify your customer and clearly define your target audience.
- Determine whether your market already exists or if you plan to create a new category
- Specify the geographical and demographic reach of your market.
- Include relevant market growth forecasts and emerging trends.
- Highlight analogous cases from parallel industries or success stories that can bolster your pitch.
It’s worth noting that VCs predominantly invest in companies chasing big markets with the potential to yield substantial returns (e.g., 10x) within 5 to 7 years. The bigger the market, the greater the potential return on investment, so make sure to have a solid understanding of the size of your market.
How To Calculate Your Market In The Startup Pitch Deck For Investors?
While many markets face volatility and uncertainty today, projecting your market's size is highly beneficial to demonstrate to investors that there is a substantial customer base for your product. The market slide commonly employs three estimates:
- Total Addressable Market (TAM) - represents the overall market demand for your product or service, encompassing wide geographic areas and potential customers with mild interest.
- Segmented Addressable Market (SAM) - describes the market segment you are specifically targeting, localized geographically, and narrowed down to your area of expertise.
- Share of Market (SOM) - determines how much of the market you can realistically capture, accounting for factors like competition, sales channels, location, team capacity, and technical capabilities.
Market Sizing Techniques
There are two market sizing techniques that you might find useful:
- Top-down market sizing - start by analyzing the current market as a whole, taking a macro view of potential customers and revenue, then narrowing it down to a realistic target section.
- Bottom-up market sizing - begin with your product and core business units, and work out how you can scale them. Understand where your products can be sold, at what price, and how much of the current market you could capture. It’s worth noting that this approach, with its level of granularity, is often preferred by investors.
A useful tip is to share with investors the math behind your market calculations, allowing them to understand how you arrived at these figures. Bear in mind that VCs commonly report that overinflated market size is a red flag when it comes to assessing startup founders.
For more information about market calculation, we recommend this article by My Market Research Methods. It's a useful tool for beginners to familiarize yourself with market estimates.
And to finish off, here are a few examples of market slides from successful startups:
Airbnb (Source)
Oomf/Crew (Source)
Hive (source)
MINT (source)
For more assistance in writing your Investor Pitch Deck and pitching your startup to investors see the following articles:
- How to Create a Perfect Problem Slide in Your Pitch Deck?
- Tips for Crafting the Perfect Ask Slide In Pitch Deck
- Common Mistakes In Startup Pitch Deck To Avoid During Fundraising
- A Bunch Of Tips On Pitching Your Startup To Investors
- How To Write Elevator Pitch For Investors
- How To Create A Pitch Deck That Will Get Your Startup Funded
For even more insights on how to create a perfect investor pitch deck click here to download Perfect Pitch - The Ultimate Startup Guide, an ebook prepared by a team of experts and investors addressing the question of how to make your startup fundraising process successful.
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