How to Pitch to a VC or Angel

This is one post/chapter in a serialized book called Startup 101. For the introduction and table of contents, please click here.

There are many books and countless blog posts about pitching (to both customers and investors). All we can hope to do here is, (1) put the pitch into some perspective, and (2) abstract the few key things that will help you when you are on stage. Most entrepreneurs are passionate about a particular market or technology, and putting a sales hat on does not come naturally to them. That is okay. Substance matters way more. But you can ruin a great opportunity if you mess up your pitch.

Keeping It In Perspective

1. The pitch is one part of a process that starts with getting a good introduction and ends with negotiation, due diligence, and closing. You can blow a good start with a bad pitch, but you can also recover from a bad pitch. So chill out.
2. Substance matters way more than presentation skills. A terribly presented pitch that begins with, “Traffic grew by 500% last month, and we got our first revenue last week,” should do just fine. Hype doesn’t help. But if you have substance, don’t worry.
3. Take a deep breath and relax. This is still a conversation, and they are human beings just like you.
4. You don’t have two ears and one mouth for nothing. Listen. It is the key to selling anything.
5. Respond carefully to questions. Take time to think of a response. Don’t be afraid to say, “I don’t know.” It’s better than BS’ing.
6. Allow enough time for dialogue. Welcome it early on. Learn how to take a question, respond, and then bring the conversation back into your flow. Your mantra is, Relaxed but in control.
7. Really, really know your numbers. Whatever they are. The numbers you should know will depend on the stage of your venture: market numbers, traffic numbers, financial numbers. Have these at the tip of your tongue, and be ready to dive into any level of detail. Business runs on numbers, not concepts.
8. A demo is not a pitch. Repeat, a demo is not a pitch. You may or may not need a demo, but just don’t rely on it alone.
9. Ask for feedback in the meeting. A “No” at the meeting is better than silence for weeks after. Be persistent, as in: “Really now, what do you think?” At best, you get a chance to address a concern while still face to face. At worst, you get a chance to fix a weak point before your next pitch or just write the VC off as an ignorant twit who doesn’t really get it.
10. Have an end goal for the meeting. Is it another meeting? Who would it be with, and for what objective?

The Slideshow. Aargh! Kawasaki Rules

You will probably need a slideshow presentation. Maybe you can do something better with screencasts or video, but investors still prefer “the deck.” Everybody really hates them, though, both entrepreneurs and investors. So, just try to do as little damage as possible. Guy Kawasaki’s 10/20/30 rule for slideshows is still the best:

• 10 slides,
• Deliver it in 20 minutes,
• In a font no smaller than 30 points.

The 10 topics that a venture capitalist cares about are:

1. The problem,
2. Your solution,
3. Business model,
4. Underlying magic/technology,
5. Marketing and sales,
6. Competition,
7. Team,
8. Projections and milestones,
9. Status and timeline,
10. Summary and call to action.

Twenty minutes give you plenty of time for questions and discussion. Tell them your presentation will be 20 minutes so that they know to keep their questions for later. Your job is to sell, not educate.

Thirty-point font size? Older people have weaker eyesight — but tend to have more money, and money is what you are after, right?

You know those really cool-looking slides at conferences with cool pictures and the occasional word? Those work great for good presenters. But investors circulate your deck among colleagues and their networks. So, it has to speak to a wider audience than the one you are pitching to directly in the meeting.

Photo credit: freakyman.