As a presentation design agency, the majority of our projects, typically around 70-80%, center on pitch decks. Yet, when we engage with clients for the first time, a recurring question arises: "Which is the better choice, a pitch deck or a business plan?"
This inquiry underscores a fundamental challenge faced by entrepreneurs and businesses aiming to secure investments. The decision of whether to pursue a pitch deck or a business plan can significantly impact the success of their fundraising efforts.
So, in this article, we will get into the distinctions between a pitch deck vs. business plan, equipping you with the insight you need to make a choice.
What's a Pitch Deck?
A pitch deck is a concise, visual presentation that contains your startup's essence and potential. Think of it as your business's elevator pitch in a deck format. It's designed to engage potential investors quickly. A pitch deck typically includes slides that cover critical aspects such as the problem you're addressing, your solution, market opportunities, your team's expertise, and financial projections.
For Example: Imagine you're launching a groundbreaking mobile app that revolutionizes how people manage their daily tasks. Your pitch deck might include slides showcasing the problem of task overload, how your app simplifies task management, your target market, the experienced team behind the app's development, and revenue projections.
What's a Business Plan?
A business plan is a detailed, written document that provides a deep dive into every facet of your startup. It serves as a roadmap, detailing your business strategy, operational plans, market analysis, financial forecasts, and more. While a pitch deck is like a trailer for your startup, a business plan is the entire screenplay.
For Example: Continuing with the mobile app scenario, your business plan would elaborate on your app's features, your marketing and sales strategies, competitor analysis, organizational structure, cash flow projections, and a detailed marketing plan.
Pitch Deck vs. Business Plan
Now, let's compare & contrast the two...
1. Purpose and Audience
Pitch Deck: The primary purpose of a pitch deck is to capture initial investor interest and pave the way for follow-up discussions. It's akin to an elevator pitch in a visual format, designed to be engaging and compelling. This is your opportunity to present the most exciting and intriguing aspects of your business to potential investors who may only have a few minutes to spare.
Example Scenario: Imagine you're at a networking event, and you strike up a conversation with a prominent venture capitalist. You have precisely five minutes to convey your business idea and why it's worth their attention. A well-crafted pitch deck can accomplish just that.
Business Plan: In contrast, a business plan is comprehensive and detailed, tailored for investors who seek an in-depth understanding of your business. It's also a valuable internal document for strategic planning, and guiding your team and operations. Business plans are typically requested when investors are considering a deeper commitment to your venture.
Example Scenario: Suppose you've successfully piqued the interest of an investor with your pitch deck. They are now ready to delve deeper into the specifics of your business. Providing a meticulously prepared business plan allows them to scrutinize financial projections, market analysis, and operational strategies. It serves as a roadmap for potential investors to evaluate your business thoroughly.
2. Content Depth
Pitch Deck: A pitch deck offers a high-level overview. It gives key highlights of your business's unique selling points, market opportunity, and growth potential. Visuals play a crucial role in making your points memorable and impactful.
Example Scenario: In your pitch deck, you might include slides that highlight your market traction, product demo, competitive advantage, and a compelling value proposition. These elements convey the essence of your business without overwhelming the audience with details.
Business Plan: A business plan goes deep into all aspects of your business. It leaves no stone unturned, providing detailed information about your market research, financial projections, competitive landscape, organizational structure, and more.
Example Scenario: In your business plan, you would include detailed financial statements, a thorough market analysis, a comprehensive marketing strategy, and an organizational chart with defined roles and responsibilities. This level of detail is crucial for investors who require more understanding of your business's operations.
3. Length
Pitch Deck: A typical pitch deck comprises 10 to 20 visually appealing slides. The brevity of a pitch deck is intentional, ensuring that it's presented effectively within a short timeframe.
Example Scenario: You're scheduled to present your pitch deck at a startup pitch competition. You have precisely 10 minutes to pitch your business idea to a panel of judges. A pitch deck allows you to convey your message effectively within this time constraint.
Business Plan: In contrast, a business plan can range from 20 to 50+ pages of detailed content, depending on the complexity of your business and the requirements of potential investors.
Example Scenario: You're in discussions with a venture capital firm known for meticulous due diligence. They request a comprehensive business plan to assess the viability of your business thoroughly. Your business plan provides the depth and detail necessary for this evaluation.
4. Call to Action
Pitch Deck: A pitch deck concludes with a clear call to action. This could be an invitation for further discussions, a request for investment, or an ask for a follow-up meeting.
Example Scenario: As you wrap up your pitch deck presentation to a group of angel investors, you conclude by inviting them to schedule individual meetings to explore potential investment opportunities further.
Business Plan: A business plan generally serves as a reference document and doesn't include a specific call to action. Investors often refer back to the business plan as they conduct due diligence.
Example Scenario: An investor, having reviewed your business plan, may initiate contact for additional inquiries or discussions based on the comprehensive information provided.
5. Usage
Pitch Deck: Pitch decks are primarily used for external presentations to investors, and potential partners, or at events like pitch competitions. Their design and content are optimized to engage and persuade a target audience quickly.
Example Scenario: You're scheduled to present your pitch deck at a startup demo day attended by a room full of investors and industry experts. The goal is to capture their attention, generate interest, and secure follow-up meetings or investment commitments.
Business Plan: Business plans are versatile documents used for a variety of purposes. While they are shared with potential investors, they also serve as an internal reference for guiding your company's strategy and operations. Business plans provide a comprehensive roadmap for your business's growth.
Example Scenario: You're in discussions with a potential business partner. Sharing your business plan allows them to gain a deep understanding of your company's vision, mission, and operational plans. It serves as a detailed reference document for collaborative discussions.
Work with us
After reading this article, if you've determined that a pitch deck is the right choice for you, we're here to provide expert assistance. Even if your preference leans towards developing a business plan, we also have a trusted partner agency ready to support your needs. So, please feel free to get in touch.
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