Your growth strategy is one of the most crucial parts of your investor pitch deck, if you cannot convincingly demonstrate your capacity to grow and scale your business, it should not come as any surprise to you that you will struggle to find interested investors.
In this article, we will seek to define what a growth strategy is, what it should include to be effective, what to bear in mind when constructing one and what to avoid in order to not put off potential investors when reading your pitch deck.
Earlier on in your deck, you will have (or should have…) already outlined the market in which you operate and no doubt referenced the size of the opportunity. This section, however, is where you demonstrate how you intend to tackle this market and seize the land grabbing opportunity that is going to generate the kinds of financial returns that you and your investors are looking for.
A growth strategy is all about how you intend to acquire users/customers/clients etc for your given business. It is about demonstrating a clear plan of action for how you will achieve these outcomes that will ultimately increase the size of your business, and the returns you will provide to investors.
When developing your growth strategy, there are three core factors you need to consider: Who, Where, and How.
To begin with, the first port of call is to identify who your customer is. That is, identify your customer profile. You will need to show what market research you have done to identify this particular customer segment. What has gone into informing why you have chosen this particular demographic?
The next thing is to identify where these customers are, what channels they use, where they are most active, where they operate, etc. Ask yourself questions like: How do you reach them? Are they on social media? Are they in online communities? Can you reach them via certain advertising channels?
Finally, think about how these customers can be converted. Emphasise what channels you are going to focus on and why, what key messaging you will use, what marketing funnel you will deploy (onboarding process, discounts, free trials, etc) to convert them from prospects into paying customers. For a B2B business, this may mean conducting test runs, pilots, demos… figuring out where you need to focus to bring in these businesses.
For all of the above, consider things like: Would a strategic partnership help? Which channels have the highest rate of conversion? Which channels are the cheapest and most predictable for you to rely on and how does that feedback into your financial model/unit economics?
Firstly, consider your learnings from what you have already done/accomplished. If you have done market research, conducted surveys, gathered databases, or if you have in fact built and scaled businesses in the past, what did you learn from these experiences that you can apply to your current growth strategy?
Secondly, consider scalability. How you will bring on customers in the most cost-effective way possible. What methods will allow you to grow most easily, ensure retention, learn about the customer, minimise drop-off, maximise engagement, etc. What exact steps are required to achieve your growth objectives? It is really important to identify exactly where the issues with scalability are before you invest financially in the scaling process.
It’s too vague/too high level. You will need to provide a relatively good level of detail to give investors confidence that there is a rationale behind your plan. Or if you do present at a high level, in the interest of being concise, be prepared to provide the detail in follow-up questions or on investor calls. You don’t want to come across as if you’ve under-researched or not thought your strategy through.
You make too many assumptions. You need to substantially back up any claims that you make. This can mean presenting research, testimonials, data, or any prior experience which can back up what you are saying. Investors will poke holes in a strategy that relies too heavily on guesswork/assumptions.
You are closed-minded (i.e. not amenable to other options, not adapting to an evolving market, not keeping on top of changes in customer behaviour). Investors want to see that you are open to trying new channels, trying new approaches, thinking outside the box, etc – if you’ve got one plan and you’re sticking with it, it can come across as stubborn and ignorant. You should make it clear that you are adaptable and able to learn as you go.
While your growth strategy is a critical part of your investor deck, the rest of the deck is important too. Click here to watch a video by our founder, Helena Murphy, about the 5 things you need to consider when writing an investor deck.
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