How to build a pitch deck which converts, for investment funds?

Pitch decks are essential tools for alternative investment funds to raise capital. However, they often fall short of their primary objective. This shortfall typically occurs because these decks are designed to inform rather than persuade. While conveying information is crucial, it does not inherently secure investment.

For a pitch deck to be effective, it must follow a cohesive storyline that aligns with your sales process and emphasizes key information that influences LPs' decision-making. Below, we present a framework and precise steps to create a pitch deck that successfully raises capital.

Begin with an Audit

When we begin working with clients, we often notice that their pitch decks contain very detailed information. While this thoroughness can be positive—allowing for comparative analysis and identification of high-impact data—it often includes unsupported claims. It is crucial to either eliminate these unsubstantiated statements or provide solid evidence to back them up. A pitch deck overloaded with information is problematic, but one lacking concrete evidence is even worse.

During your audit, consider the following key points:

1. Is your pitch deck targeting a specific type of investor or multiple investor types?

2. Does it emphasize the opportunity you are offering rather than focusing solely on your fund?

3. Have you clearly defined your market position?

4. Is the market opportunity well-defined and supported by data?

5. Have you illustrated your investment strategy clearly and explained its relevance to the specific market opportunity?

6. Have you detailed your due diligence process and how it ensures you select the right market opportunities?

7. Does your pitch deck include case studies that highlight your investment thesis, transaction background, and rationale?

8. Is your pitch deck concise, maintaining a balance between text, data, and illustrations?

Once you reflect on these points, it's time to move on to the next step: comparing your pitch deck against your sales process. This is essential because a pitch deck is designed to sell, not merely to inform. Start by outlining the stages of your sales process.

‍

The pitch deck should follow a similar structure to your sales process, which often involves significant tailoring to the target. Therefore, we recommend creating three distinct pitch decks to target high-net-worth individuals, family offices, and institutional investors. Discover, “How to build Investor Personas and Why?”. In the case where your fund solely targets institutional investors, a breakdown should not be applied. However, a clear definition of the profile of the institution is important.  

While auditing your deck may seem time-consuming, it is a task that can substantially enhance its effectiveness and, consequently, increase conversion rates.

Identify your market position

Identifying your market position is crucial for standing out in a competitive landscape. A clear market position highlights your fund's unique value proposition, making it easier for investors to understand why they should choose your fund. This differentiation is essential for targeting the right investors and aligning your marketing efforts effectively. Additionally, a well-defined market position ensures strategic coherence across your operations, enhancing overall effectiveness and building investor confidence.

To establish your market position, start with thorough market research to understand the competitive landscape and key trends. Define your unique value proposition—whether it's your investment strategy, risk management approach, sector focus, or historical performance. Understanding your target audience allows you to tailor your pitches and communications effectively. Emphasize your unique strengths to ensure investors clearly see the advantages of choosing your fund. Regularly update your market position based on market changes and investor feedback to maintain its relevance and appeal.

Identify the market opportunity

Identifying the market opportunity your fund provides is paramount to attracting and retaining investors. Clearly defining the market opportunity not only showcases the potential for growth and returns but also demonstrates your deep understanding of the market dynamics. This allows you to position your fund as a solution to specific market gaps, making it more appealing to investors.  

Additionally, backing your market opportunity with data and analysis builds credibility and trust. By effectively communicating the market opportunity, you can illustrate the strategic advantages of your fund, ultimately driving investor confidence and interest.

Illustrate the investment strategy and due diligence process

Consider the example of an asset-backed lender. The primary goal of your pitch deck should not be to convince investors of the merits of asset-backed lending itself, but rather to highlight the specific market opportunity you’ve identified. After introducing this market opportunity earlier in the pitch deck, it is crucial to provide concrete evidence on how you recognize and capitalize on it for your investors. This is achieved by clearly illustrating your investment strategy. The term “illustrating” is used intentionally, as your strategy must be easily comprehensible to LPs by integrating text with the design of the deck.

You can effectively communicate your investment strategy and due diligence process by following these steps:

1. Define the Investment Universe (X): Start with a broad definition of your target market.

2. Narrow Down Based on Investment Strategy (Y): Filter this universe according to your specific investment criteria.

3. Refine Through Due Diligence Screening (Z): Further narrow down the opportunities through a rigorous due diligence process.

By clearly and concisely illustrating these points, your pitch deck will provide the necessary evidence and reassurance to LPs, showcasing your thorough approach and the strength of your investment strategy.

Implement the information based on this framework

The structure of your pitch deck should be tailored to your specific target audience. Since each fund caters to a unique audience with distinct products, it’s challenging to provide a one-size-fits-all structure. However, we do have a general framework that is highly effective:

1. Who are you?

2. Why do you exist?

3. Why this asset class or strategy?

4. Why now?

5. Why you?

By ensuring your pitch deck answers these key questions, is tailored to your audience’s specific needs, and backs its claims with solid evidence, you significantly increase its ability to persuade and convert potential investors.

Captivating Prospective Investors’ Attention

Before we begin working with our clients, we often identify a common problem in their pitch decks: the presentation of information. A pitch deck is a presentation, and successful presentations do not follow a rigid template, which is often what general marketing consultants provide. These consultants typically lack experience with alternative investment funds and struggle to illustrate complex concepts such as investment strategies and due diligence processes effectively.

Incorporating deck copy (text) into the design is crucial because the design should enhance the text. This means having a design that visually supports and simplifies the complex concepts of your fund for investors. While this may seem like a minor detail because they are industry experts, it is essential.  

Your target audience has limited time and cannot spend excessive amounts of it reading through your pitch deck. Therefore, it’s important to make it easy for them to grasp the intricate aspects of your alternative investment fund. Achieving this involves using design and text that clearly and concisely explain your case studies, investment strategy, and due diligence process.

Utilize Data to Improve Your Pitch Deck

Distributing your pitch deck in a manner that enables you to gather data is crucial. By collecting data on how your target audience engages with your pitch deck, you can leverage these insights to refine and enhance it. This data-driven approach allows you to make informed assumptions about potential investor objections before engaging in conversations, thereby improving your chances of success. Visit our article on Investor Objections - How to Identify Them Before You Get on a Call?.

Below is an example checklist summarising key points from this article to aid your pitch deck creation:

Checklist:

• Target a specific investor type.

• Emphasise the opportunity over the fund itself.

• Clearly define your market position.

• Support market opportunity with data.

• Illustrate your investment strategy and relevance.

• Detail your due diligence process.

• Include relevant case studies.

• Maintain a balance between text, data, and illustrations.

Conclusion

By continually refining your pitch deck using data-driven insights and following this framework, you can significantly improve your chances of successfully raising capital.

If you would like to receive a pitch deck audit or learn more regarding the optimisation of it, get in touch with us.  

‍