Pitching is a huge part of any Founder’s journey. You do it in sales, you do it when you are raising funds, you do it when you’re trying to close a deal with a potential supplier or partner, you even do it when your friends ask you about your business. It’s rare to meet a start-up Founder who hasn’t memorised their “elevator pitch” by heart.
By doing it so many times, pitching becomes a habit which is good for one’s confidence, but it risks to get you used to making some crucial mistakes that eventually undermine your pitch. We have previously written about the key elements of a pitch deck, but there is much more to this subject than a great-looking PowerPoint. The following are some counter-intuitive tips to make your pitches truly stand out to any VC investor, and to help you make the most of your time with them.
Some of the contents of this blog are available as a series of very short videos by VC firm NFX. You can find it here.
Always Be Data Driven
We live in an algorithmic world where we have so much access to huge amounts of data during our daily life that we don’t even realise it.
Chatting about the weather with your colleague? Chances are that one of you will quote the exact temperature forecasted for tomorrow. We take that for granted, but such accurate numerical predictions is something we only got access to within the last couple of decades.
Our whole world revolves around numeric data, especially in business: you wouldn’t accept “a lot” as an answer if you ask your VP about sales data. Then why would an investor?
Always make sure that everything you say during your pitch is data-driven. Avoid sentences that don’t have numbers in them, preferably two numbers per sentence.
This helps investors quantify your achievements, benchmark them against their portfolio companies and other companies that they might be considering, and ultimately show that your mindset is that of someone who cares about the details, acts based on results and knows their company inside out. All qualities of a successful Founder.
Another key characteristic of this data-driven world is the use of graphics and charts. If “a picture paints a thousand words”, then a good chart can summarise a thousand numbers! Use compelling infographics in your pitch deck, some that include the key metrics of your business and how they interact with each other.
Charts also have the power to stick much more than speech or text in the viewer’s memory, as well as to catch their attention. This means that you can use them to direct a VC’s attention to a particular piece of data that is important to you.
A great way of doing that is actually drawing a sketch of your chart on a whiteboard – if there’s one in the room – on your notebook, or even on a napkin if you’re meeting the potential investor over lunch or coffee. Use that to emphasise what you believe is fundamental information, so you can come back to it later and show how it fits in the grand scheme of things.
Pitching Is A Performance
Try to think of your pitch as a performance show, as if you were a musician playing a concert.
Your fundraising period is like a concert tour, where you present your work to several different audiences. They paid a ticket in the form of committing their time to you, and now you need to convince them that it was worth their while.
As musicians pick the best players to perform on stage with them, you too have to choose carefully who of your team you want to bring along in the presentation. You have little time on your hands, and as much as many people (your co-founders, your VPs…) will want to be there, you can only afford to bring the ones that will perform best. Pick the ones who you’ve heard speak with the most confidence and fluency about key topics, and try to avoid the ones who don’t perform well under pressure.
Have you ever seen Madonna sing in jeans and a hoodie? The way you look at an important meeting inevitably plays a role in determining your first impression. Always look smart, sharp and tidy, not just in your outfit but even in how you place your stuff on the desk and how you arrange icons on your computer desktop. It costs you nothing but it could avoid potential investors from assuming you’re a slacker just because you haven’t put your good shoes on.
Every stage is different, and so is every sound system. That’s why musician get there the day before an important show to check that everything works at its best and even do a couple of rehearsal. Try to do the same and be at your pitching show at least 15 minutes in advance. It doesn’t sound like much, but it allows you to prevent embarrassing PowerPoint malfunctions, make sure that you haven’t forgotten anything and – most importantly – make sure you don’t keep your crowd waiting for you.
It’s showtime, you walk onto the stage and start playing (pitching). Do you sit down and let the slides do the talking while you repeat the pitch that you learned by heart? Not at all! You should be using your whole body to communicate: stand up, use your hands to point at the whiteboard or projection, and interact with the audience. People’s attention span is limited, especially that of someone who listens to up to 15 pitches like yours every day. It’s fundamental to own the space around you, it goes to show your confidence and pragmatism, as well as your passion.
Speaking of passion: no one likes a singer who is not “feeling” their lyrics. How much you and your team believe in your project is a great indicator of success. You have to show to a potential investor, preferably without saying it explicitly, that you are extremely committed to this venture and are not afraid to work hard to achieve your goals.
Finally, just like artists who go on tour, you should be able to notice a difference between your 1st and 20th shows. Every time you pitch is a learning opportunity for you, where you understand what works and what doesn’t, what your audience wants to hear, what are your best hits. Use that information to modify your pitch accordingly, and you’ll notice a massive improvement over time.
Connect With Your Audience
Most Founders will know what it feels to talk about their business with many different people. Fellow Founders often like to share similar (mis)adventures, friends and family are often curious even though they don’t really understand what is it that your business actually does. VCs are a completely different breed.
Before you start preparing your pitch, it’s important that you put yourself in the investor’s shoes. A VC typically meets over a thousand Founder’s each year. They invest in only a handful of these. Rejection is so intrinsic into a VC’s job that their brains become trained to spot the negatives. That’s why sometimes they appear sceptical, asking questions seemingly aimed at undermining you, or even come across as rude. Most times, that is not the case at all: they are just screening your company for red flags to make it easier to justify a rejection, which will be the inevitable outcome 99% of the times.
It’s not an easy job, so what you want to do is to try and make it easier.
If you have been introduced to a potential investor by a mutual contact, chances are they don’t know too much about you. This means you’ll waste a lot of your (and their!) time talking about basic information about your company. Sending a brief in advance can help them familiarise with your business model before the actual pitch, meaning they get there knowing what questions to ask and having (at least subconsciously) already invested time and energy in your company. This makes it easier for you to dive into what they really want to know, which is why and how your idea is going to be successful.
When doing this, you should also make sure to do the necessary research on their firm. Think about how they’ll have to justify their interest in your company to their partners. What key takeaways do you want them to remember? What kind of metrics and characteristics do you think matter the most to them? Answer these questions by looking into their current portfolio and their past work experience, then use that to customise your pitch deck for that particular investor in such a way that they can find what they’re looking for as quickly as possible.
Lots of Founders look at VCs as authoritative figures on a higher level than them, but that should never be the case. Although it is understandable that since you’re the one asking them for money, you’re in a position of disadvantage towards them, but think of it as if you were the one selling something to them, which you are: you’re selling them a fraction of your successful business!
So don’t shy away from asking questions (more on that below), making conversation and ultimately establishing a connection on a human level. After all, if they do end up investing in your business, it means you’ll have to work together on something that means a lot to you, at least for some time. Connecting with them on a human level not only makes them more likely to give you a chance, just because they like you, but is also a great first step in the perspective of a future collaboration.
1% Of Times You Win, 99% Of Times You Learn
We cannot stress it enough: a VC meets with a thousand companies a year and then only four or five end up in their portfolio. That is, even to the most daring gambler, shockingly bad odds. When you walk into a meeting to pitch to an investor it’s not “all or nothing”, you are not there exclusively to get their money, also because even in the best of cases it will take much more than a single pitch to get to that.
What you should really aim for is the investors’ interest and their input. If they feel like they’ve wasted time with you, they won’t be keen to hear from you in the future. There might be a million reason for them not to invest in you, but if they think your idea is good, then they will do their best to help you as they can, as would any decent human!
The key point here is that every pitch is an opportunity for you to get a free consultancy from someone who evaluates successful companies for a living, and you can have tens of those within a single Funding Round, but only if you know how to make the most of it.
Whatever amount of time you are given for your pitch, use it wisely. Subtract five minutes for the initial introductions, and because they might need to shoot out to another meeting earlier than you expect. Of the remaining time, only 1/3 should be used to pitch, the rest is for questions.
Part of the questions, of course, will be asked by your audience. Those should not be overlooked: if investors always ask about one metric, then maybe you should include it in your deck. Always bring a pen and take notes of the investors’ questions, try to answer promptly and when you don’t know something, show your proactiveness and find it out, or show your interest and ask them why they want to know.
The most important questions, though, are the ones that you should be asking them. Remember that they see many companies like yours everyday, so feel free to ask them what they think of your business, whether they find your model convincing and – most importantly – what could be improved.
You could also be very direct and ask about their firm: what they look for in a company to become part of their portfolio, what kind of commitments they require in terms of board sits or share class. Obviously, try to read the room and avoid asking such questions if no one is showing the slightest interest, but in any other case there’s no reason for you to hold back. In the best of cases you’ll get a head start in future negotiations, and in the worst of cases you can get a benchmark of what to expect from other VCs you are pitching to.
Always play the long game, your goal is to raise your target within a Funding Round that will involve 10-20 potential investors. Not all of them will put money in your business, but if you play your cards right all of them can share precious advice that will help you run your company more successfully. If everything goes right, they’ll be the one picking up the phone to call you and ask you for a piece of the pie!