Pitching VCs and angels is a vital core competency for most founders. Here are a few tips to consider.
Know Your Audience
First and foremost, don’t bother pitching investors who are not interested in your space, other than for practice as suggested below. Do your research and focus your efforts on those who are most likely to be excited about what you are doing.
Second, understand and accept the fact that VCs and angel investors have widely differing preferences – and even quirks – when it comes to pitches and decks. Some want lots of detail in certain areas, while others are put off by those details and prefer to see and hear more about other areas.
Before meeting with a specific VC or angel, consider asking others who know them what questions they tend to ask and be prepared to respond to them.
If that’s not an option, consider fishing directly for a little guidance:
“We’re looking forward to meeting next week, Sarah. Please let me know if there are areas your team tends to dig into that might warrant some extra homework on our part. Thanks.”
Be Flexible and Prepared
Don’t prepare a canned talk and hope to control the conversation. Be ready to answer every conceivable question about your company and your idea, including your product roadmap, go-to-market strategy, key performance metrics, relevant unit economics, key customers and prospects, competitive position, intellectual property strengths and weaknesses, cap table details, funding needs, proposed uses of proceeds and myriad other potential topics.
Before any series of key fundraising meetings, run through your pitch with an experienced friend, acquaintance or mentor who knows all the right questions to ask.
Even with substantial preparation, your pitch and your command of the details is likely to improve with each meeting. Consider scheduling your most promising pitches last and your least promising ones earlier in your fundraising efforts.
The most compelling founders are those who can tell their story effortlessly and passionately without leaning too heavily on a deck. Look and listen for opportunities to open up the conversation rather than mindlessly walking through a canned talk.
Avoid the temptation of packing in too much for the allotted time. I encourage founders to have no more than 11 or 12 slides, speak at a moderate pace and stay at a fairly high level until there are questions.
Staying focused on key parts of the story and staying out of the details makes for a more natural and relaxed pitch and leaves more open space for a conversation and a personal connection to develop.
Lastly, avoid using unexplained jargon, terminology and acronyms that will lose your audience. Nobody appreciates the feeling that a presenter is intentionally or carelessly speaking over their head.
Listen Carefully and Respond to Questions Thoughtfully and Completely
Listen carefully and watch for any important body language clues. You want engagement and you want questions. Pitching is somewhat like negotiating. Your best source for information on getting from point A to point B is usually right in front of you. Let them talk and ask questions so you can figure out how best to hook their interest and gain their support.
When you get questions or comments, be sure to listen 110% and answer the question or comment posed. We all tend to think ahead under pressure. And sometimes we think we know a listener’s question before it has been fully formed. Answer the question that was asked, not the one you want to answer.
When I hear a founder miss the mark answering a question, I can only imagine what the VC or angel is thinking – and none of it is good. Only sometimes will the questioner repeat or rephrase a poorly answered question. When the conversation simply moves on, there is no telling what, if any, damage was done.
Investors need to trust that founders they give their money to will listen to their concerns and consider their guidance. If you won’t listen before they give you money, why should they believe you will do so later?
Great Demonstrations Leave a Lasting Impression
Whatever your product or service, be sure to incorporate a demonstration or other hands-on experience. Let your audience engage with your platform, product or prototype, even at the risk that they might encounter bugs or possibly break something.
A surprisingly high percentage of demonstrations fail for preventable reasons. Common culprits are connection or connectivity issues and insufficient testing and preparation. Bring every conceivable cable and connector you might need and always have a backup plan. If it’s software, always ensure others aren’t simultaneously engaging in testing or maintenance activities that will undermine the demonstration.
Don’t Obfuscate, Exaggerate or Lie
It’s hard to imagine a more damaging mistake than playing loose with the facts and having that discovered or even merely suspected. If you don’t know the answer to a difficult question, admit it with a simple “That’s a good question. I’m not sure how best to answer that, but I’ll look into it and get right back to you.”
Many founders are tempted to downplay their competitors and overstate their competitive advantages. If a competitor has raised substantial funds and is getting traction in your space, you need to understand as much about them as possible and be able to discuss logically and credibly how you expect to compete against them. Use your key competitor’s service if you can, talk to their customers and read any and all of their advertising and positioning materials. Your audience should not be more familiar with your competition than you are.
Lastly, make sure your numbers are credible and supportable. The best founders know their numbers inside and out, backward and forward, and they can speak thoughtfully about where to expect possible upside or downside variances.
Using unrealistic numbers to get a high valuation is a mistake that can haunt founders for a long time, even if an initial fundraising is successful. Missing unrealistic numbers down the road can lead to lost credibility and difficulties in future funding rounds. Stretch goals are great, provided you have a realistic possibility of hitting them.
As with most things, in pitching investors, it is better to under-promise and over-deliver.
Paul Swegle has served as general counsel to numerous tech companies and advises a dozen others as outside counsel. He has completed $12+ billion of financings and M&A deals, including growing and selling startups to public companies ING, Capital One, Nortek, and Abbott.
Paul has authored two authoritative and practical business law books, available for review and purchase here: