A successful startup pitch deck is one of the most essential materials founders can use during fundraising. In our series of articles breaking down all the vital slides, we have been uncovering the perfect formula, providing examples of successful startup pitch decks, and sharing insights from experts. We've already covered over half of the pitch deck components, including the problem, solution, product, market, competition, and go-to-market strategy. Today, it's time to delve deeper into the business model slide, which includes all about monetization and pricing.
So, let's discover how to create a winning business model slide for your startup's pitch deck for investors.
What Is a Business Model Slide in the Startup's Pitch Deck for Investors?
The business model slide is one of the key foundations of your entire pitch deck, as it includes information about how your startup will make money. This slide should provide a clear and concise overview of all your company's revenue streams and the value it creates in the market. This is a place to go deeper into the financial aspects of your startup.
Bear in mind that while your monetization and pricing models may evolve as your business matures, this slide should focus on your general strategy — how you'll generate revenue from your products or services and where your income streams will come from.
Why Is a Business Model Slide Important for Investors?
Crafting this slide is crucial in the fundraising process. It allows investors to see your current revenue and provides insight into your future financial prospects. Investors want to know if, as your business grows, you can expand and introduce new revenue streams, ensuring the safety of their capital and potential returns. They also assess whether they can add value and profitability to your venture, and if your monetization model aligns with their interests and experience. It's essential to align your pitch deck and business model with potential investors' profiles, as many funds have specific criteria for the types of startups they invest in, whether B2C or B2B.
What to Include in the Business Model Slide in the Startup's Pitch Deck for Investors?
This section provides information about your revenue streams, pricing models, and monetization strategies. When determining your offering's price, consider factors like the value it offers customers, their willingness to pay, usage frequency, and the monetization model and pricing strategy most commonly used by your competitors.
The in-depth content of this slide varies very much based on your business type. If you are a SaaS company developing software solutions, consider focusing on pricing models and variants. You can also share your customer Lifetime-Value (LTV), Customer-Acquisition-Cost (CAC), add-on services, monthly customer growth indicators, and other relevant metrics that you find important to show the soundness of your business. If you offer physical products, a different strategy should be chosen — consider sharing details like gross margin, average selling price (ASP), sales and distribution channels and well as metrics relevant for these channels.
Be sure to also include details regarding the 'Natural Frequency of Usage' - a matter of the frequency with which users typically encounter the challenges or issues resolved by your product. It could greatly vary depending on the characteristics of what you offer. Understanding the pattern of user engagement provides companies with valuable insights for crafting targeted marketing and sales approaches. It is one of the key information extremely useful for setting up attainable and effective KPIs. Since the utilization of a specific product varies based on individual users and their requirements, tailoring KPIs with a focus on user behavior is certain to enhance overall user retention.
If your startup has multiple revenue streams, show them and try to explain why you prioritize diversification overfocus.
Questions That Will Help You Craft a Perfect Business Model Slide:
- What are your sales channels? (Highlight unique or innovative strategies for a competitive advantage.)
- How much revenue does each channel generate now and in the next 1–2 years?
- How do these revenue streams align with your product or service offering?
- What is your customer acquisition cost? Can you lower it?
- What is your monetization model (e.g., freemium, ad-based, subscription, consumption-based, one-time payments, take rate etc.)?
- Do you have only one model, or do you mix them depending on the market segment?
- What is the frequency of usage of your product?
- How does your pricing strategy compare to the industry standard?
- How do market trends affect your business model?
- What are the KPIs for your business model?
- How to increase the LTV?
- How do you balance growth with profitability?
How To Create A Business Model Slide If You Don’t Make Money Yet?
There are situations where your startup may not be making money yet. This could be due to being in the early pre-seed stages of development or operating in industries like biotech or the space sector, where it's customary for years to pass before the product can be launched and revenue generated. In such cases, it's still important to include this slide, keeping in mind the storytelling aspect that we've emphasized throughout our pitch deck articles. In fundraising, storytelling can make or break your idea; this slide is no exception. Demonstrate how you plan to generate revenue and convince investors that you can quickly pivot towards profitability if needed and turn on your monetization strategies.
Business Model Slide in Startup’s Pitch Deck For Investors — examples from successful startups
Yalo (source)
Pendo (source)
Fibery (source):
Hive (source):
Tips and Tricks for a Successful Business Model Slide:
- Remember that there is no golden rule for monetization and pricing models. If you have multiple customer segments, you will need a different model for each customer segment (e.g. marketplaces).
- Remember that the frequency of usage matters. It is one of the key factors that should be taken into account when setting up goals and KPIs for the company.
- Avoid vagueness; clearly state your value proposition and future revenue streams.
- Create a sense of urgency for investors—explain why your solution is required now, as timing is crucial for business success.
Business Model Slide in Startup’s Pitch Deck For Investors - A Summary
The business model slide serves as a key foundation for showcasing how a startup plans to generate revenue, what the revenue streams and sales channels are, and what the pricing plan and monetization strategy are. When crafting this slide, it is important to be clear, and concise and avoid vagueness and generalities. It should include information such as sales channels, revenue projections, customer acquisition costs, and how different monetization models align with the product or service. Moreover, startups that aren't yet generating revenue should use the tool of storytelling to convince investors of their future profitability.
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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