10 things to absolutely avoid when pitching
If you google ‘how to pitch a vc’, there’s no end of posts with advice on how to ace a pitch. In my experience, though, I more often come…
If you google ‘how to pitch a vc’, there’s no end of posts with advice on how to ace a pitch. In my experience, though, I more often come out of a pitch frustrated by the things founders do not have, or things they’ve messed up, that fluff their chances. By and large, it’s not rocket science, but often, it seems that preoccupation with the big ticket points, e.g. Market size/ potential upside, can lead to basic mistakes. Here goes:
Don’t forget to show that people actually want to use your product. Even if your audience show a keenness to use your product, investors worth their salt won’t assume that their own preferences are necessarily a guide to the market. So show you’ve tested the market. At the very least, demonstrate that you’ve asked people whether they would pay for it (e.g. structured surveys). Better if people have actually paid for it, and even better, repeatably paid for it (hence importance of MRR/ ARR). This is hard to argue with.
Don’t forget to explain what your product can be used for. I’ve seen quite a few pitches where founders are ultra-techy, and get bogged down in their tech, especially in the B2B/ B2B2C space. If you don’t explain your use cases, you’re expecting your audience to think up where paying demand will actually come from, and revenue seems that bit further away (see point 1).
Don’t forget to tailor your message. Who is the audience, and what do they care about? Another obvious one, but with a bit of research, you can really hone your message to use your time as best as possible. If you’re pitching for investment, understanding the VC’s fund size and portfolio can really help. For instance, if a fund is clearly shaping up around a certain thesis, e.g. that distributed ledger tech will disrupt several sectors — you can play into that, and you probably don’t have to explain what blockchain actually is.
Don’t forget your why. People don’t always buy what you do — they often buy why you do it. Apple is a great example of this. They will sell a laptop by focusing primarily on their commitment to challenging the status quo— the actual features of the laptop seem secondary. Simon Sinek’s principle of “starting with why” applies just as much to startups, and is even more important when you are pre-product, as you essentially don’t yet have a “what” to sell.
Don’t stretch your data… too far. It’s inevitable that you want to choose the metrics that reflect best on your company, but you need to balance this against the need to build trust with your audience — your potential investor. I’ve been in meetings when a founder has focused on the total number of employees in a trial client (several 100k), when the number of actual trial users was in single figures, and daily users was very low. It didn’t do much for the trust between us, and it’s hard to rebuild the relationship from there, especially over a 30 minute meeting.
Don’t over-complicate — what’s the one-liner? At least initially, you’ll be speaking to an associate, and they’ll probably have to sell the product internally to their partners/ investment board. You’ve got to prepare them for that conversation — and this means giving them a compelling, short summary that can be easily conveyed.
Don’t try to tell them everything. Founders understandably want to impress upon investors how much they have done, but unless it’s relevant to answering the key questions, highlighting what you did “pre pivot” might just serve as a distraction to the key info, and undermine the message taken back to the “decision maker” (see point 6).
Don’t overuse buzzwords, unless you really need them. In 2015, I could swear everything was taking place using blockchain tech, and last year, absolutely everything SaaS was built using AI. Quantum computing seems to be having its moment in the sun now. Use the buzzwords if they definitely add value to your product, and you know what you are talking about. But if it doesn’t add value, or you don’t really know what it is — again, you might just undermine trust with your audience. If you’re talking to investors, the chances are they are reading a lot about whatever tech is “on trend” right now, so avoid the bs.
Don’t forget that ability to execute is always front of mind. Founders often cover the basics well— the tech, TAM, team, traction — but you need to remember that unless investors think you can execute on your plan, there’s very little hope for you. Some investors even ask for user milestones for the next month, just to test the team’s ability to execute at their next meeting. Demonstrating an ability to execute is difficult, especially if you’re a first-time founder (different if you’ve had exits, obviously), so make sure you tick off the little things. Call when you say you’ll call; give an account of why you haven’t hit milestones, where you’ve fallen short.
Don’t forget what you are here for — what is your ask? This one applies more to pitching outside the usual “pitch for investment” scenario, where the ask is obvious. In other settings, there are lots of other things you can get out of a pitch — mentors, a link up to new team members, potential trial clients — make sure you make this clear, so you get as much value from the pitch as possible.
These aren’t exhaustive, but they are ten simple mistakes that come up remarkably often. A lot of them are really linked to a simple theme — when you are pitching, you don’t have much time, so focus on giving your audience exactly what they need to give you what you want (e.g. investment), while ensuring you don’t sacrifice trust in the process.
*Co-authored by my colleague Mike Stokes