How to pitch investors
No matter whether you’re after seed funding or Series A, whether you’re a B2B or B2C venture, or if you’re a natural presenter or uncomfortable when selling, chances are you’ll need to pitch to an investor. They are the gateway to funds and other resources that can turn your idea into a reality.
We (at Ravner) have walked the pitching path ourselves for our own ventures and for other clients’ startups. Here are five things we learned that are worth taking into account when pitching an investor. (Everything here applies to a VC as well.)
When you schedule your first meetings, don’t go straight for the investors you feel are perfect for your venture. Instead, make sure that those first two or three meetings are with investors that weren’t high on your list. It’s impossible to nail your pitch on the first try, and you want to make sure you don’t lose an opportunity before you have damn good answers ready for the major questions your story raises.
Before you arrive at the meeting, take a look at the investor’s portfolio. In addition to learning what type of ventures the prospective investor feels more comfortable with, what you are looking for is a mutual connection on LinkedIn. Maybe a CEO of one of the portfolio companies, maybe some other contact. Talk to these people and find out who your investor is. Is it someone who is after the numbers or do they care more about the quality of the founders? Do they have a ‘thing’ that turns them on or off (for example, “don’t mention blockchain” or “they would really like your social impact element”). Plus, an investor will listen to someone he knows and trusts before s/he will listen to you. Advance your chances of having valuable contacts that will work in your favor.
Tell the best version of your story. There are always some aspects of your pitch that work better than others. It can be your amazing beta numbers or the emotional story of how you came about launching your venture. There isn’t one way to pitch your story or construct your deck, and you want to make sure you tell the most effective version of your story (and not what you think investors want to hear). If you made a good first impression, chances are that all things relevant will end up being discussed.
Investors are people too. They are not members of a secret society. Some of them are friendly, some are rude, some are clearly great businessman, and with some….it’s less clear. You also never know what meeting was held before yours or what buzzword annoys your investor … So, in the absence of solid intel, your best bet is to always go with what you believe is the most important thing to know about your venture. Know what you stand for, why you stand for it and back it up with hard numbers. Given the humanity and fluidity of the situation, remember that the tone of your voice carries no less weight than the content of your words. A prime example is the question of valuation. To be honest, and especially in the first rounds, your company is worth whatever someone is willing to invest in it. Therefore, while you MUST justify – logically and soundly – your estimated worth, conviction is key.
That being said, if you don’t know something, say that you’ll check it and get back to them. This reply is better than giving half-answers.
To the extent you can, ask questions. It’s date, not a keynote. If you left the meeting and the investor spoke half of the time, you did something right. Questions are also important to draw the investor closer to you and your venture. A good question is also a great place to start your pitch. If you have a question that will most likely get the investor nodding in agreement, open with it. (For example, do you ever feel like you could use the time that you’re stuck in traffic better?)
We said five tips, but do you want to hear one more great tip?
(See what I did there?)
Less text on deck is better. When presenting, and using a deck (you don’t always have to), make sure that this presentation-version-deck has very little text in it. When there is text anywhere on the screen people will read it (it’s uncontrollable) at the expense of listening to you. Use titles and short points just so you’ll construct order to the narrative, both for the investor and yourself.
If you got a yes, than its a matter for another article.
If you got a no, remember that “no, thank you” is what Investors mostly say. So while you don’t know how many “no”s you need to go through before getting to a “yes. You do know that each ‘no’ gets you closer to it.
Go Get ‘Em!