Every year, I listen to hundreds of startup pitches.
Many of the pitches I hear are from very early-stage companies—the majority of which are pre-launch or pre-revenue concepts. This early on in the startup process, there really aren’t any financial metrics to look at or even other vanity metrics (like user acquisition costs, lifetime value, or growth rate) with which you can evaluate the business. Instead, I’m looking for a founding team who I believe can build something compelling that will also pique the interest of customers and investors 12-18 months down the road.
With some pitches, I’ve started writing a proverbial check before the team even finished presenting. And with others, I’ve heard promising concepts led by what I felt were unprepared, uninspiring founding teams.
To ensure the success of each and every investor presentation you give, here are a few tips I encourage you to consider as a new founder:
1. Your pitch should be well-rehearsed.
There’s no such thing as being “too prepared” when it comes to pitching. You only have one first impression, it’s like going on a first date; wear your best suit, be prepared, bring roses, you get the point.
In fact, one of the best pitches I’ve ever heard could’ve won an Academy Award. The founder “performed” his pitch—brimming with energy, charisma, and confidence—in a way that’s only possible if you’ve rehearsed the same lines over and over again.
Conversely, I’ve also witnessed a founding team huddle together and frantically mumble over each other after we asked a question they clearly weren’t ready for. Even worse was the person who contradicted their co-founder mid-pitch. Never “Well, actually…” your co-founder. If a founding team isn’t on the same page during a pitch, when will they be?
As you prepare your pitch, anticipate likely investor questions, and formulate and rehearse answers.
Readiness is key.
2. Define the roles and responsibilities of your founding team.
Investors need to know your founding team has all the right people—and that each founder fits well into his or her respective role.
We call this “founder fit.”
When introducing your team, go beyond “Brian’s the tech guy; Jacqulyn’s the marketing maven.” Tell us why Brian’s the tech guy, and how he approaches his role. Share with us why you chose Jacqulyn as CMO, and how she plans to develop a go-to-market strategy.
In order to gain investor buy-in, you have to prove your team can build, market, and sell a product. In other words, prove “founder fit.”
3. Craft a compelling founding story.
Investors want to be inspired by your story, and excited about investing in your startup.
In my experience, the most profound founder stories involve a troubling personal experience, the identification of a problem without an adequate solution, and a strong desire to develop one. A good example: A founder experienced inadequate care for her schizophrenic brother and decided to build a telehealth startup focused on aiding families with schizophrenic members.
Even if you don’t have a founding story of this magnitude, every founder has a story. A reason for doing what they’re doing. And there’s always a best way to shape and share that story.
Make sure you know your story and are able to articulate it in a concise, compelling way.
4. Include a qualifier that proves your potential.
“We built an amazing product,” means nothing. There’s no proof.
“We built an amazing product—and sold the company for $28 million a year later.”
That second part—the monetary, measurable aspect—qualifies your claim.
The more you can “prove” the milestones you’ve reached, the easier it is for investors to get on board with your vision for the company. Even if they’re small milestones, make them known and explain how you achieved them.
5. Make sure you know who the best speaker/salesperson is on your founding team, and let them lead the pitch.
A team of technical, soft-spoken founders might possess the work ethic and aptitude to build an incredible business.
But as investors, we also look for a charismatic salesperson/hype person on the founding team. Someone who can communicate the future of the company and inspire people to come along for the ride—not just when it comes to pitching other investors, but also building loyalty amongst customers.
Steve Jobs was a brilliant product designer, but he was arguably an even better motivator and communicator.
6. Follow the 7×7 rule when creating your pitch deck.
Don’t expect investors to read a novella per slide during your pitch. If your deck is cluttered with disconnected information, graphs, and too many words, how are we supposed to understand anything?
Your deck should be no more than seven words across or down. Otherwise, it’s too busy. If you can say it in ten words, try to say it in five. And if you can say it in five words, try to say it in two. When it comes to pitching your company, less is always more.
7. Don’t ask investors to sign NDAs.
We don’t (usually) do that.
Mainly because, if we come across a startup doing something similar, we need to be transparent with them. And your pitch shouldn’t typically contain proprietary or confidential information anyway. Of course, there are exceptions: deep tech, medical devices, and truly novel concepts (which are few and far between).
In most cases, though, asking investors to sign an NDA before a pitch only is a needless hassle, and gives the impression you’re inexperienced and don’t understand what’s typical.
8. Be upfront about how much you’re looking to raise, and on what type of deal (convertible note, SAFE note, priced equity, etc.)
Not all investors agree on this. But I think it’s important for us to understand as much as possible about what we’re getting into, right from the start.
For me, it’s a red flag when a founder says, “We need a million dollars, or maybe a million-and-a-half.” That’s a $500,000 difference. Do you even know what you need the extra half-million for? Don’t feel the need to spend it.
Most importantly, you should know exactly how much capital you need to accomplish X. This shows you have clear goals, know how to reach them, and don’t take investor capital for granted.
9. Understand that your founding team’s pedigree will affect investor confidence and valuations.
As investors, we expect to pay a premium when investing in a startup led by a serial entrepreneur with multiple billion-dollar exits.
Why? Because these entrepreneurs have a proven track record and have demonstrated in the market they understand how the startup game is played and what is required in order to be successful. They know what it takes to compete at the highest level against established companies and other just-as-hungry founders.
That said, entrepreneurship is a wonderful game because anyone can play, and anyone can build a successful business. In order to get started on the right foot, however, it’s important to remember that pitching is like opening night. You only get one chance to make a good first impression—so if you want a second meeting, make sure you hit the first one out of the park.