10 Mar 2020
As promised in my previous post about planning your fundraise (aka all the work you do leading up to this point) — here are some concrete, tactical tips for the creating & giving the pitch itself.
Ideally, the pitch won’t be the first meeting (that should be a quick meet and greet). However, whoever you’re pitching to will have to re-pitch your story internally, so it’s your win if you can make that job easier overall. Remember that your pitch deck doesn’t travel with your voice-over, so irregardless of if you send it out before or afterwards, or with or without a meeting — make sure the deck can stand alone as a simple, plain vanilla pdf (and only a pdf).
- Start with your vision — VCs live in the future and we want to know where and how your product or service fits into that future. So, within the first few minutes, give us the big picture THEN walk through how you’re planning to get there, and how far you’ve come. Too few teams actually talk about their grand vision. Instead, they spend all their time on tactics and strategy — and while these are important too, a great team will iterate on them anyway. So taking a tip from US entrepreneurs, tell us what prize you’re after. Then, if we believe in your North Star, we can have a healthy discussion about ways to get there. And if not, we can both save each other a lot of time by moving on swiftly.
- Show your metrics over time — this is the NUMBER ONE request we usually have at the end of a pitch. Your data tells your story, so showing your metrics over time shows both the journey you’ve been on and, importantly — your future trajectory. Showing your historical time horizon also indicates transparency. We know not every metric will be developing perfectly, but hearing how you’ve managed to change and improve things will reveal how your team thinks and works. Here are some more points to take note of when it comes to data:
- Be transparent (Rule #1)
- Show all your data on time horizons, not just financials
- When you show future metrics, especially non-financials, explain what levers you have for changing them vs today
- If you’re really pro, show your cohorts
- Have backup data ready (more on that below)
- Try to hide, twist, spin, or sugarcoat; If your numbers are sub-par, own up and explain what you’re going to do about it
- Show cumulative or aggregate charts
- Show quarterly data (everyone just assumes you’re hiding bad monthly data)
- Show stand-alone data points
- Show a creative LTV/CAC ratio (this is an own-goal)
3. On the subject of data, have plenty ready for follow-up questions — If I’m very cynical here, the longer it takes to turn around a data request, the more suspect we may become that you’re not actually on top of your metrics. Instead, have your data at your fingertips. The best teams we’ve come across can and do share dashboards, cohort data, raw data — the works. And they do this very quickly. It’s a sign of being a data-driven company and having data in the DNA. This is even more important if you’re a B2C company, and it almost always comes through during the pitch or quickly thereafter.
4. Acknowledge your competition — It’s part of a VC’s internal work to assess the market and we’ll probably quickly know that you’re not the only player in your space. Acknowledge the market dynamics in general and your position versus your competitors — especially if you’ve got serious ones. By doing so, you can preempt questions about moat, USPs, etc. If you have deep market knowledge this can be your time to shine. It could also be a chance to identify a great potential investor if the VC has experience with the market too. Pro-tip: find a more creative (and let’s face it — transparent) way to show your positioning than a 2x2 matrix with you in the top right and you’ll be of to a good start.
5.Keep the pitch itself short — Work towards your pitch being taking up about half of the timeslot you’ve got booked, regardless of the meeting length.. This means you’ll have to really prioritize what you show initially vs what you leave open for follow-up, but the tradeoff is making it through your whole pitch — which is well worth it!
6. Be fun — We’re all human and chemistry is important if we’re both considering working closely together for years to come. Hopefully there’s a spark between us however formal or informal, eccentric or not, we both are. However, this doesn’t mean we’re looking for copies of ourselves. This means if you’re a formal-genius-introvert and/or cynic, then bring your informal-charismatic-friendly-fun partner. Someone on the founding team needs to have charisma if you’re going to be able to attract talent, investors, customers, and partners. It’s best if you can have a sense of humor about the whole situation (which we acknowledge isn’t all that fun, really…see below).
7. Take feedback gracefully — We know that hearing “no” sucks. (For the record saying “no” sucks too). That said, HOW you take feedback is also a data point for us for when you’re fundraising again or when we compare notes with other funds. If you disagree with the feedback, then agree to disagree and get back to business. Nothing is more convincing (or satisfying ;)?) then simply proving us wrong. If you have clarifying questions where answers will help you build your business, then ask them, but otherwise it’s best to move on.
While you’re here, one last thing:
I want to acknowledge that fundraising is a pain in the ass. I fully respect you all for getting out there, hustling, repeating yourselves, re-sending slide decks, being available at weird times, accommodating last minute meeting changes, and getting back on the horse with energy and enthusiasm when you’ve heard no more times than you can count. I’m humbled by each and every meeting, I want you all to succeed, and I want to thank you for making me optimistic about the future.
Good luck out there.
Ashley Lundstrom, EQT Ventures