How To Pitch VCs by Bill Clark | Thursday, August 30, 2012
“I’ve looked at thousands (tens of thousands?) presentations pitching new businesses since the mid 1990′s. The vast majority of them suck. Unfortunately, it’s not PowerPoint’s fault…”
“As VCs, we're excited to hear your idea for a breakaway company that can change the world. At the same time, if we have to sit in another buzzword-filled, vague, overly-complex, grandiose, hyperbole-peppered session, we'd rather drink bleach.”
So are you wondering how to give a pitch that doesn’t suck? If you are then you need to read this. Because you’ll learn how giving an effective pitch is like building a beautiful house. Follow this blueprint and your pitch will stand head and shoulders above the hundreds of poorly designed presentations out there.
The Foundation: A Captivating Introduction
Your introduction must be captivating. Remember, VCs listen to hundreds of pitches a year from excited founders just like you. So you need to wake them up with a strong emotional appeal right out of the gate.
And like any successful sales presentation it must be highly emotional. Top salespeople understand selling is mostly an emotional act, not a logical one. Pitching VCs is no different. Of course it can’t be all hype. You’ll need to validate your claims with hard data but don’t underestimate the importance of emotional appeal.
The Framing: Building on the Foundation
After you’ve laid the foundation with an intriguing introduction your next step is to build on that. As a house takes shape during the framing process so must your presentation. This middle part of your pitch is where you frame your business, the problem it solves and how it ties in to the real world. You’ll need to cover the following points quickly:
- Business Overview (Bird’s eye view)
- Management Team (Titles are not as important as the people.)
- Your Target Market (What problem do they have?)
- Product or Service (How does it solve that problem?)
- Business Model (How will you acquire, service, and retain customers?)
- Strategic Relationships (Do you have partners, affiliates, etc.?)
- Competition (Even if it’s just the old way of doing things.)
- Barriers to Entry (What are they?)
- Financial Overview (Capital, Profit Margins, etc.)
- Use of Proceeds (What do you plan to do with the money?)
A successful pitch covers each point in a clear and succinct way. You want your presentation to flow naturally (don’t ever read your speech or rely too heavily on PowerPoint) and build momentum all the way to the end. Your goal is to get your audience on such an emotional high that they want to write you a check before they leave.
The Wiring, Pipes and Hardware: Your Integrity
During your pitch seasoned VCs will be making observations, not just about your business, but also about you. That’s because they invest in people first, ideas second. While the rest of the world will admire the idea -- or the building if you will -- investors understand that without integrity, that building, that “great idea” is just eye candy.
In order for your startup to succeed and become a thriving business it requires a leader with integrity, resourcefulness and persistence. And while you can’t come right out and proclaim, “I’m a leader with integrity!” You can tell short stories about yourself that demonstrate you are a person with integrity. Think of times you did the right thing even when it wasn’t easy.
VCs know storms will come. And it’s in those times of adversity where your true colors will show. Just as a beautiful roof without hurricane clips anchoring it to the walls will be ripped away during a storm, so it is in business. Without integrity a founder is more likely to fail when the going gets tough.
The Climactic Close
Every presentation should have a clear beginning, middle and end with each part building on the prior one. When done right, your presentation will gather momentum all the way from the initial spark in the introduction and climaxing at the closing.
The closing is where you take a step back and look at what you just built. Circle back around to the main point you gave in the introduction and then provide a clear call to action. Let the VC know what it is you want them to do next. Be clear, confident and brief.
If you follow this blueprint you’ll avoid giving a pitch that sucks. Instead you’ll appear confident, competent and someone who VCs want to invest in. Remember, successful VCs invest in people first, ideas second, and your pitch is a reflection of who you are. So take the time to prepare and do it right.