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How to Pitch to VCs

Luke Smith

Investor

Pitching to VCs can be a nerve wracking experience for entrepreneurs and, unless you can hit positive cashflow very early, you are likely to do plenty of it. As each company (and each VC) is different, there is no one correct way to pitch but having sat through hundreds of pitches, I’ve seen best practices that tend to lead to more productive meetings.

Understand who you are pitching to - and tailor your pitch accordingly

In an earlier article I covered the importance of doing your research on VCs to get to a meeting, but your work doesn’t stop there. Once you’ve gone to the trouble of understanding the investor you are speaking to, you should tailor your presentation to them. You’ll have more success if you can frame your business to fit the investment focus and experiences of the VC you are meeting. Investors build pattern recognition and you should try to emphasise the similarities to their past success whilst explaining the differences from failures they have seen.

Be structured, but don’t be afraid to go off piste

There is no one right way to pitch a business but you are responsible for making sure your audience understands the opportunity. That doesn’t mean you need to walk through a deck (although it often helps) but it does mean you need a structured narrative. Even if you decide not to use a deck, you should expect to follow a flow covering the same basic areas. Preparation is key, make sure you can effectively communicate the opportunity and why it is exciting (as discussed by my colleague Matt in a previous article).

That said, you can’t be bound by the structure and have to be responsive to your audience. If an investor wants to dive into a specific area of the business you should engage with them. Ultimately, the purpose of the meeting is to help them understand the opportunity and you should be willing to adjust your narrative to do that. If you routinely get questions that break your flow, it suggests that you should reorder your narrative. Again, preparation is key; it’s much easier to adjust on the fly if you know your material inside out.

Set your stall out early - help an investor understand what you do and why they should care

Spare a thought for the person you are pitching. While, for you, your business is no doubt both deeply exciting and easily comprehensible, they are probably new to the opportunity and trying to get up to speed quickly. As such, it’s your responsibility to make it simple to understand what you are doing and why that is important. Make sure you don’t get too caught up on market size and pain points to explain to nuts and bolts of what the product does. Some businesses are more complex than others but if I’m 15 minutes into your pitch and I don’t know what you do, it’s a problem.

If you have good traction you should also allude to that early on to give context to the discussion. Investors will pay a lot more attention if they realise that you have done something rather than that you plan to do something. A pithy summary of your success to date can be very effective at focusing the mind of a listener early on in a pitch

View questions as an opportunity not a threat

You should expect questions, lots of questions. Don’t treat questions as potential gotchas, to be overcome or avoided, but as opportunities to explore your business with someone with a different, and potentially valuable, viewpoint.

Given the need to work with founders over the long term following investment, being evasive or dismissive towards questions is a strong red flag for VCs. Good founders will engage with questions, demonstrating both their understanding of the space and their willingness to learn from others’ experiences. There will always be some uncertainty in early stage businesses so it’s fine to answer a question with “I don’t know”, but if the answer is vital to the survival of the business you should be able to articulate how you will find out. Bluffing is a big no.

Be on top of your numbers

You should expect to be asked about your metrics and you should be on top of them. Even if you normally let the Head of Finance handle the figures, whilst speaking to investors you should be able to give the relevant metrics for the business and have an understanding of what they mean. (See these articles on financial modelling, customer lifetime value and KPIs). Having a strong grasp of your metrics will reassure investors that you understand the levers you can pull to grow while weak answers can raise concerns as to whether you understand the fundamentals of your business.

Be respectful of time

In the world of startups everyone is busy so it is important to respect people's’ time. If your meeting is an hour you should aim for around 30 minutes of material to leave plenty of time for questions and discussion. Often pitch meetings are back-to-back so if you haven’t gotten to your killer slide within the hour you never will. Keep track of time and skip to the important bits if you realise you aren’t going to cover everything you need to cover in the time available. It’s also good practice to ask how long your audience has for the meeting to avoid unexpectedly being cut short.

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