Physical products with software margins
Hardware investors are acutely aware of capital intensity and manufacturing risk. Your pitch must show a credible path from prototype to production, while demonstrating a software or services layer that improves margins over time.
Component cost per unit at current and target production volumes.
Benchmark: Show cost reduction curve to target volumes of 10K, 100K, 1M units.
Projected hardware + recurring software/services margin at target volume.
Benchmark: Hardware alone: 30-50%; with SaaS attach: 60%+ achievable.
Percentage of units passing quality control in production.
Benchmark: Target 95%+ yield rate; show current rate and improvement plan.
Weeks or months from order to delivery for a production run.
Benchmark: Consumer hardware: 16-26 week lead times typical.
Percentage of hardware customers taking recurring software or service contracts.
Benchmark: Strong hardware businesses: 60%+ attach rate within 12 months.
Show a credible path from prototype to production
Prove you are more than a hardware company
Address the capital intensity directly
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