July 19, 2017
Pitching. It’s as much a part of startup life as building products and acquiring customers. If you can’t successfully pitch your company, you likely can’t raise money or sell to prospects either. The point is, it’s critical to get your pitch right. But crafting an effective pitch can be a daunting task if you don’t know where to start.
Lucky for you, I’ve scoured the web for advice from top venture capitalists, combined that with my own experience judging the Startup of the Year Competition, and distilled the most common and applicable advice into this simple guide. Let’s dig in.
Be An Essentialist
To start, keep it simple and be an essentialist in your pitch. Focus on what is necessary and discard the rest, both in your deck and in your speech. When you’re pitching, whether it be to investors or accelerators (which are investors), understand that they see hundreds if not thousands of companies come through their doors every single year. Your pitch has to be concise and to the point if you want to hold someone’s attention. They want to know why they should care about what you’re doing. Provide enough detail for the person on the other end to understand the what and the how, but be brief enough that you don’t lose them.
Do Your Homework
Know your market, product, and customer acquisition strategy better than anyone in the room. This seems like it would be a given, but oftentimes it’s not. You should intimately understand:
Total Addressable Market and Target Market
These tell the investors how big the opportunity is, and where you fit within it. Investors are looking at a lot of things when you pitch, but one of the main questions they’re trying to answer is if they can make a good return on my money in this market if this team executes. Your pitch should answer that question for them.
Customer Acquisition Strategy
In short, how will you make money? You’ve addressed your target market in the point above, now how will you acquire that target market as customers? How much will it cost? Will you use paid strategies? Will you build a sales team? How long do you think the sales cycle will be, and how quickly do you think you can grow? Investors understand a lot of this will simply be best guesses, but those best guesses are important because they show you’re doing your homework on how you’d put their capital to work.
Who You’re Pitching To
You should know the background(s) of who you’re pitching to, and incorporate that into your pitch. Do they come from the industry you’re in? Then you likely don’t need to spend a lot of time explaining the market. What size of deals do they normally invest in? Do they have investment criteria or themes? And if so, do you fit within them? What does their existing portfolio look like?
If you haven’t answered these questions ahead of time, there’s a decent chance you’re wasting both your time and theirs. You don’t want pitch a $500K investment to a fund that normally invests $2MM or more, and you don’t want to pitch your health tech business to a fin tech fund. You’ll look silly.
Sell Your Team
Most investors are looking at your team just as much as they’re looking at the market opportunity. They want to know why your team has an obvious advantage in this market. Find out if your backgrounds align with what you’re trying to accomplish. What does your team know that others don’t? Do you have a history of executing? Show the opportunity, and then show why you’re the team to capitalize on it.
Real traction, not vanity metrics. Use Google Analytics, active users, revenue growth, and other hard numbers that show this is where we were before, and this is where we are now. An idea doesn’t become a company until there’s traction behind it. There’s a trajectory to successful companies that shows a general trend of up and to the right. If you haven’t gone to market with your product yet, then show the traction you’ve made in building your product. Investors ultimately want a team that executes, and traction is how you display that execution.
Tell A Story
Storytelling has been around as long as language, and it’s deeply tied to our psyche. Use a compelling story to hook your audience on why they should care. This could be the story that led to the creation of the company, or a story about an early customer you’ve had a significant impact on. Think about something that has an emotional hook and speaks to why it’s so important to solve the problem you’re solving. At the end of the day you’re pitching to humans, and humans emotionally connect to stories. When you combine stories with hard data about your opportunity and your traction, investors have something compelling they want to be a part of.
Be Specific In Your Ask
How much money do you need? When are you looking to close your round by? What will you do with the money? The people you’re pitching to are in the room to see if a deal between the two of you makes sense. Don’t beat around the bush—be direct and concise in what you need, why you need it, and when you need it by.
The points above lay out a handful of things you should do, but there are also a number of things that you shouldn’t do. Namely, don’t be inauthentic, fluffy (all story with no data), or overplay the opportunity while underplaying the risks or competition. This goes back to doing your homework and being honest about the opportunity at hand. If you check the boxes above while avoiding the don’t-dos, you can be comfortable knowing your pitch is in a good place.
From there, all that’s left to do is execute. Pitch a lot. If you’re raising money, you’ll most likely be pitching on a regular basis, and the feedback you receive from your pitch should be your best teacher. View each pitch as an opportunity to learn and improve, and view feedback through the lens of “What can I learn from this?” instead of attaching emotional investment and responses to it. Pitch, learn, adjust, pitch again.
Read more about pitching to investors at TechCo
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