10 Tips For Pitching VCs and Angel Investors
By Anna Johnson on June 22nd, 2009ReadWriteWeb has provided a great guide to pitching venture capitalists (VCs) and angel investors for investment funding.
It’s a great article and forms part of ReadWriteWeb’s serialized book called Startup 101. Here’s my take in the form of 10 tips for pitching VCs and angel investors:
1. Have a clear objective. Are you pitching to get an answer… to get another meeting… to sound out investors on your startup… or to practise your presentation? Whatever it is, be clear about your goal so you have something to measure your performance against.
2. Relax. Pitching is just one part of negotiating a deal. It’s unlikely that the entire future of a great business rests on one pitch. Sure, you may stuff up a presentation and not get funded by a specific VC… but no real entrepreneur would let that hold them back, right?
3. Substance matters more than form. What you say is more important than how you say it. Sure, as with any selling situation you’ll want to tap into the emotions of your buyer (the potential investor)… but the emotional ‘buttons’ of someone considering whether or not to invest millions of dollars in your company are likely to be different from those of a customer looking to buy your product! As a rule, be straightforward not hypey. Let your product – not your presentation – provide the ‘wow’ factor.
4. Listen when your potential investors speak. Again, the most effective salespeople are those who listen more and talk less. A pitch situation is no different.
5. Carefully answer questions or address comments. Don’t feel rushed into telling someone what you think they might want to hear, or ‘wing it’ by making stuff up. Nothing will kill your chances of getting funded more than being found at as someone who isn’t honest. If that means you need to answer some questions with ‘I don’t know’ or similar, so be it.
6. Make time for dialogue within your presentation. Time the pitch so there’s enough time to answer questions that spring up during and after your formal presentation.
7. Know your key business and industry metrics. Every business has some key business and industry metrics which define their performance. When you’re pitching for investment capital, your potential VC or angel investors will expect you to know these metrics.
8. Don’t equate your product demonstration with your pitch. Sure, you’ll want a killer demo, but you can’t rely on it to ‘do all the talking’.
9. Ask for honest feedback. Find out what the VC or angel investor thought about your pitch, product, business, etc. Not only will you then know where you stand with regard to that particular investor, but you may also be able to clear up a misunderstanding or at least get some pointers you can use for the next pitch.
10. Follow this general format for your presentation.
Cover these topics:
- Problem
- Solution
- Business model
- Technology
- Marketing and sales
- Competition
- Team
- Projections and milestones
- Status and timeline
- Summary and call to action
If you use slides, follow Guy Kawasaki’s 10/20/30 rule: 10 slides in 20 minutes using no font smaller than 30 points.
Pretty good tips, eh?
Source: Bernard Lunn, “How to Pitch to a VC or Angel,” ReadWriteWeb, June 17, 2009
