What is the difference between a business plan and a pitch deck?
Business plan, pitch deck, teaser, executive summary... It's sometimes hard to find your way through all this start-up nation vocabulary that seems to be so important for developing your start-up or raising funds. If you are launching your start-up, sooner or later you will ask yourself those questions that all entrepreneurs ask themselves at some point: "but what is the difference between a business plan and a pitch deck? "What should I present to my investors is my pitch deck or my business plan? "Can Venture Capital (VC) and Business Angels (BA) funds ask me for both? "Do I need both documents to apply for a grant from BPI France?
Today, we're going to take a look at the differences between a business plan and a pitch deck. differences between a business plan and a pitch deck.
The Business Plan, the strategic heart of your project
The business plan is the strategic heart of your project. The business plan (BP) is a written document that summarises a project to create a company or start-up. Its purpose is to determining a strategic course of action to be carried out over the next 3 to 5 years. It is generally divided into two parts: the Commercial business plan (in Powerpoint format) and the Financial business plan (in Excel format). The business plan requires a lot of research into the market and the competitive environment, as well as a lot of work on formatting it so that it can serve as a blue print for the start-up for the next few years. guideline for the start-up for the next few years.
This is often one of the first steps for entrepreneurs to formalise all their research and documentation and is useful for both the start-up and the investor. for future investors. The form of the business plan is often predetermined and leaves little room for originality. The business plan is therefore first and foremost a detailed plan that start-ups set for themselves and that they are expected to follow for the next few years.
Did you know that?
Building a business plan is often one of the first steps for entrepreneurs to formalise all their research and documentation and is useful for both the start-up and future investors. The form of the business plan is often predetermined and leaves little room for originality. The business plan is therefore primarily a detailed plan that start-ups set for themselves and that they are expected to follow for the next few years.
The pitch deck as a synthesis of the business plan
Today, we hear more and more about the pitch deck (also called " deck") and probably much more about pitch decks than about business plans. Until a few years ago, investment funds swore by business plans, but for some time now a new trend seems to be emerging and the pitch deck is now even called " the new generation business plan". The pitch deck is intended to be a rendering of more synthetic and concise than the business plan. The pitch deck is generally shorter than the business plan (often 15 slides maximum compared to 15-30 slides for the business plan) and contains only what is essential to present the project in a few minutes. To give just one example, instead of all the financial information in the business plan, the deck only contains KPIs(key performance indicators) such as MRR(monthly recurring revenue).
The pitch deck is often based on the business plan. It corresponds to a synthesis and formatting of the business plan .
What is the return for your investors?
You've got it, the pitch deck is the document that you will use to pitch your start-up to your investors, whether they are Venture Capital funds (VCs) or Business Angels (BAs). This is the document that the funds will ask you to send them before they talk to you in person. So why do you need a business plan?
Firstly, because we have seen that the business plan is what feeds the pitch deck. Making a pitch deck without a business plan is - firstly - not really possible, but it is like building a house without a foundation. Without a business plan, the pitch deck is likely to remain superficial and you may find yourself at a loss when investors ask you about your pitch deck.
HEC Junior Conseil has had a lot of feedback from its former clients, which has allowed us to realise the importance of the business plan for investors. Several funds did so after their first exchange with them. also ask start-ups after their first exchange with them. Hence the importance of perfecting this document beforehand!
Similarities and differences between a business plan and a pitch deck: a summary.
| Business Plan | Pitch Deck | |
|---|---|---|
| Size | 15-30 slides | 15 slides maximum in general |
| Format | Often landscape, designed in Powerpoint and delivered in PDF for the Business BP and Excel for the Finance BP | Often landscape, designed in Powerpoint and delivered in PDF |
| To present to investors (VCs or BAs)? | May be requested by your investors to get more information and see the credibility of your project | Yes, almost always |
| Level of conciseness of the deliverable | Quite concise but contains all the information needed to set up your strategy for the next 3 to 5 years | Very concise. It really does contain the essentials to enable investors to understand your project quickly |
| Logical order of design | First deliverable to be written | Second deliverable based on the business plan |
| Importance for the strategic management of your company | ★★★★★ The business plan is intended to be the guideline for your strategy |
★★★ The deck contains less information than its Business plan counterpart and is mainly used for a quick and synthetic overview. |
Now that you know more about the difference between a business plan and a pitch deck, we invite you to read our articles " Why have your business plan and pitch deck made by a Junior-Enterprise " and " 5 reasons to call on HEC Junior Conseil ".
