Pitching to Investors

How to Pitch Your Startup to Investors

Pitching your startup to investors is just as much art as it is science. I’ve personally pitched 100+ times and I’ve been pitched 100 more. I’ve learned a lot about what works and what doesn’t. This article outlines some of the key things to focus on to win over investors.

The Art of the Pitch — Part II

I believe pitching is as much art as it is science. Last week I attended the Tech Coast Angels fast pitch competition at UCLA, an event I won in 2007. As I was listening to the pitches, I realized that the quality of the presentations were dramatically better than when I was on the stage 5 years earlier. I also attended the Mucker Labs demo day the other day; another great event and another observation about pitches. Pretty much every pitch was at par or above.

Certainly anyone in the startup scene in LA can see that the quality of entrepreneurs in this city has gone up as a whole in the past few years. This is probably one reason the pitch bar has been raised so much. But I think there is another reason. I believe the science of pitching, particularly in large group settings and on stage has become more commoditized.

There has been an explosion of startup events from Startup Weekends to demo days. Pretty much anyone with an idea and a napkin has had an opportunity to get on stage and pitch their vision. Because of this, coaching, feedback and examples of what works and what doesn’t work have become much more prevalent and readily available. There are a clear set of attributes that must be included in the pitch and it’s not hard to find out what those things are.

Just five years ago, the science of pitching was a bit more of a secret that you often had to learn the hard way (by doing bad pitches) or by hunting for a mentor in small pool of experienced people willing to lend a hand.

That leads me to the other side of pitching, the art. I believe the art of pitching is probably more important than the science. The art is what distinguishes you and your company. When you pitch to a large audience, particularly when everyone is delivering well organized, thoughtful, clear and consice pitches, you need something to stand out from the pack. Interestingly this is exactly what was missing in the TCA pitches and even the Mucker ones.

Many of the pitches lacked personality. Nothing really resonated and I was left feeling a bit odd because I knew I had just heard a great pitch, but I really had no idea if the business and team was something I wanted to invest in. The pitches were almost robotic in a way.

It’s just an observation of course; a hypothesis. But it makes sense and it’s rather ironic. For a while there people just sucked at pitching (frankly that’s why I won the TCA competition in 2007 because pretty much all of the other pitches were mediocre to piss poor on the science side. The fact that I delivered a clear and concise message when everyone else was all over the place made it an easy vote.

So I go back to the art. The art is differentiation and being different, in a sea of same, is exactly what people connect with… particular if that sea of same is actually a quality pitches not shit ones.

The Art of the Pitch — Part II

In the first part of this article I talked about pitching to an audience, primarily on stage. What about pitching to a small group of people, like a VC or investor meeting? Pitching in this setting is quite different and requires a different approach. As it relates to the content here, I’m speaking primarily of super early stage pitches; seed, angel, back-of-napkin

I’ve sat in more than 100 of these pitches here at Amplify since November so I’ve seen just about everything; the good, the bad and the REALLY ugly. I figured I would share some best practices (and worst practices too).

I think pitching in an intimate setting like a conference room with a handful of people (3–5) is more art than science. It’s largely about reading the participants and adapting in real-time. The best pitches I’ve seen are very dynamic in that they don’t follow a script, they know when to speed up or slow down, and they shift from high level to detail specific on a dime. Here are 11 do’s and don’ts to consider.

Know Your Audience

It’s a well-known strategy that most of the best salespeople do a shitload of research about the company and people they are selling to before they meet them; down to the schools their kids go to. This approach works just as well in a pitch. The more you know about the people you’re pitching, the better you can tailor the conversation. Know which companies they’ve invested in. Know what kinds of products and services they like. Know the names of people they respect or do business with. Don’t be creepy, be smart.

Watch Body Cues

Seriously, pay the fuck attention to what people do with their bodies in the meeting. I’m always surprised at how little this is monitored but it’s chock full of cues. When people begin to get fidgety, they’re losing interest, it’s time to speed up or change topics/gears. If they’re leaning forward listening attentively, give them more. If they pretzel and look confused or in disbelief, slow down and articulate your points better.

Don’t Get Defensive 

You’re going to get objections, it’s all good. Don’t get defensive about it though. Take it as insight; perspective and feel free to disagree. But watch the tone and tempo, if things start to get heated or people “puff up” too much, don’t push it and divert the conversation. I’ve seen conversations go totally south and never come back from this.

Get to the Point

Yeah, this sounds obvious, but I swear, people take forever to get to the point. You don’t have a long time so know what the most important points you want to get across are (which btw usually are one of just a few things like: what your product does, how you make money, the problem you are solving, etc.). Whatever the most important things are, get too them quickly, if the pitch goes well you’ll have time later to get into a deep discussion on the ancillary coolness that you’re accomplishing at the same time like being a green company or whatever.

Don’t Read Slides

Too many people read slides in pitches, don’t do this. The easiest way to solve this is to not write complete sentences on your slides, then there’s nothing to “read”. Just have bullets and talk to them. If you don’t know how to do that, then practice with your co-founders beforehand.

Do the Demo

If you have a demo, then get to it, quick. The demo speaks a thousand words and by the way, you can speak while you show the demo so better to do it sooner than later. If you don’t have a demo, that’s cool; try to show screenshots or wire frames. I also like to show comps of competitors or other products that are similar enough that give a sense of how nice you think the design should be (which you should have already done yourself anyway).

Pretty up the Deck

 This is an amazing thing; a pretty deck actually goes a long way. I’ve been in pitches where the company had a beautiful deck but the idea was total shit. The founders are often given an incredible amount of leeway to talk through the business; this can lead to a pivot even in the meeting. This isn’t a terrible thing btw, particularly if the investors take some ownership in the ideation and want to see you be the team to execute on it.

Incidentally, as much as I think the pretty deck is a good thing, a shitty deck can hurt you even more. Creating a beautiful deck is effing easy, just copy someone else’s beautiful deck; no shame. Yes, the content will be unique, but use their header, typeface, content style, etc. Making a shitty deck is harder, most likely because you spent a shitload of time filling it with text and ugly graphs or pictures. Pro Tip: less is more; less content = more attractive deck.

Listen Up 

Two things; people love to hear themselves speak and smart people say smart things. When you’re pitching to investors listen to what they say. They’re either going to tell you exactly what they want you to say or they’ll give you real nuggets of value, probably both. When you’re talking most likely you’re not listening, there is a good chance they aren’t either so be very aware of your listening; it’s actually a tricky thing, just ask your wife.

Adjust Cadence Velocity

This is a big one, I talked about it a bit in #2 — watch body cues. You need adjust the cadence and velocity of your pitch throughout the meeting to maintain the perfect balance of engagement and understanding. This is best learned from practice, so pitch a lot.

Be Confident Not Cocky

I really don’t like cocky people, even those that have earned the right to be cocky. It’s just annoying. But being confident is essential. My experience has been that people invest in confidence as much as anything else and confidence can go a long way when everything else is shit. If you believe in what you’re doing, and you better, then show it.

Let people know you have confidence in your vision. Backing it up with real data points and metrics can help, but even without that, confidence works alone.BTW, confidence goes hand-in-hand with passion; don’t forget passion. Passion with confidence is a killer combo.

Ask for Help

Finally, let them know what you need from them. Investors, like anyone, want to be wanted for more than just money. Frankly, at this stage, the money is not important; it’s everything else: guidance, mentorship, introductions, etc. Tell them how much you appreciate all that. Even if they don’t invest, you might get all that shit for free!

If all you did was these 11 things, well you’d probably be in pretty good shape. That said, here’s one more thing to consider; what’s the biz? For a long time I was solely in the camp of make money or bust. I have become willing to venture out of camp and look at deals that don’t necessarily have a way to make money right away, maybe even ever.

But here is my take on that as it relates to pitching meetings. Be honest and self-effacing. If you have a business model, then explain it CLEARLY, if you don’t, that’s fine, but don’t beat around the bush about it. Just say “hey, we’re in the business of acquiring users, once we have users, I think we can all agree there will be numerous ways to monetize; so let me share our strategy on user acquisition.” But then, you better share some good thinking about, and hopefully some metrics, around customer acquisition.

While I’m on the subject of metrics, you should have some idea of the key metrics you need to track and monitor in order to know if shit is actually working. I can’t tell you how many pitches, companies even, that have no sense of the attributes they need to be watching.

I guess I’ll close with this. I’ve noticed some of the best pitches turn out great for the most unexpected reasons.