In this article, we shall discuss what is a Pitch Deck and a Business plan and how they differ from each other.
In case you are an entrepreneur who is working out the details of your first startup, you might have a lot of questions. Whether it is fundraising, legal aspects, hiring, or even setting up a company; everything looks complicated at first. Also, the chances are that most such entrepreneurs will have to go through multiple meetings and client calls to land their first gig. An essential part of fundraising is having the right pitch deck and a business plan. A question that a lot of entrepreneurs have when initially starting out is, “ What is the difference between a Pitch and a Business plan?”. Also, you must be wondering which comes first, which is more important and why we need them. In case you have such doubts, read on because, in this article, we will cover the fundamental differences between a pitch and a business plan!
What is a Pitch Deck?
A pitch deck is a visual presentation with around 10 to 20 slides that help investors get a gist about the business plan. These presentations are usually the first information that the investors receive about the business or company. In many ways, it is the first impression that the investor gains about the company, which is crucial. The pitch deck, which is usually delivered as a Powerpoint, acts as a visual aid during the vocal presentation.
Pitch decks for investors serve as an introduction, which helps them gain some understanding of how the business works. Moreover, it helps share information about the company, the product, and the market in which it functions clearly and concisely. It also lays out market strategies, explores future opportunities, and explains your business model. Further, a good pitch deck is about presenting your research and analysis in the most visually pleasing manner possible. Essentially, it allows an investor to see how far you have grown, where you are now, and where you want to be in the future.
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Business Plans in Pitch Deck
A business plan is a document with around 50 to 100 pages that explains everything about your business. Additionally, it is a thoroughly researched document that conveys in great detail everything about your business, from marketing to finances. Additionally, it also includes information regarding your plans for the company in the years to come. Further, it is fundamentally comprehensive research done not just of your business but also the industry it is a part of. Further, a good business plan contains information regarding the marketing, operations, HR, and sales of the business. Additionally, business plan templates detail how the upper management works, what each member brings to the team, and how the company will accomplish its goals. Moreover, rather than something that comes out in the initial meetings, a business plan is probably the first part of the due diligence process before finalizing the deal.
What Comes First, Pitch, or Plan?
The Pitch And A Business Plan is actually a document that takes a long time to create. It requires days and months’ worth of analysis and research. Additionally, having a good business plan or business plan format will ensure that you have the right processes in mind to grow your business. Moreover, it acts as an essential part of the documentation as it showcases your growth and how you want to run your business. Therefore, you must first have a business plan before you draft out a business pitch or pitch deck. While Venture Capitalists relied heavily on business plans in the past, as the number of entrepreneurs increased, they found themselves being short on time. It is around this time that pitch decks became popular. These serve as more succinct summaries of the business plan, allowing the VCs to understand roughly how a business runs. Therefore, the pitch deck is almost like a subset of the business plan.
| Criteria | Pitch Deck | Business Plan |
| Length: | 10 – 15 Slides of Presentation | Document of over 50-100 pages |
| Mode: | Via Powerpoint, Prezi or Keynote | Usually a Word File |
| Representation: | Heavily Visual in nature | Mostly text-based |
| Goal: | Helps introduce the company | Helps convince the investor to invest |
| Purpose: | Serves as a Summary | Serves as a fool-proof research |
| Time frame: | Usually during the introductory phase | Traditionally used during the due diligence process before finalizing a deal |
| Research: | Requires little research | Requires extensive research |
| Occurrence: | Based on the business plan | Independent document that is created first |
| Implementation: | Vocally implemented via a presentation | Verbally implemented as it is read by the investors |
| When you Need Them: | To get a meeting with an investor, an introduction to start a conversation regarding funding, while trying to network with investors | To finalize a deal, when seeking debt, in case you want to add co-founders, whenever you want financial assistance for large amounts |
In most instances, you will need both a pitch deck and a business plan. Moreover, which one you will need depends a lot on the industry you work in and what stage of the fundraising you are at. During the earlier stages, it is the pitch deck that is more important. However, as you go through the stages, the investors will need more and more information about your company. During such times, it is your business plan that will be scrutinized by them. While some argue that a pitch deck is more important as it has a higher chance of being seen by investors, both are important. Therefore, as a pitch deck comes via your business plan, you cannot draft a good deck without having a sound plan in place.
Conclusion
While there is a tangible difference between Pitch And A Business Plan when it comes to investment terminology, at the end of the day, the source of both of these concepts is clarity in vision and business philosophy. So at the end of the day, as long as these two are set in stone with the founders, then it is just a matter of presentation. So when you have an idea for a product, you must also introspect on the monetary vision of the product which will ensure its sustainability in the long run.
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