Most Startup Investors and Venture Capitalists seek hundreds and thousands of startup decks and pitches each year, I have already talked dozens of time on most common mistakes startup founders make at pitching and how to fix them, here are the top 5 things I wish startup founders knew before pitching or sending a deck to Investors.
1. The problem you are solving
Before pitching to Angel/Business investors/Venture capitalists, the first things I wish you knew is that you should start by talking about the big emerging problem you’re solving, out of the gate, investors like me are in triage mode, time is valuable and we are immediately trying to figure out if this could be something super interesting or not. It’s like how a doctor triages the patient when they come into the emergency department, no pulse and if the body is cold no need to do anything further, in under a minute that doctor will get to know that the patient is gone, how does that relate to VCs and startups? the problem you’re solving is your pulse and over 50% of startups fail because they’re not solving a big and urgent problem that customers care about deeply, if you cannot convince an investor like me that you’re solving something big and important for customers that means your startup probably doesn’t have a pulse. The side benefit of starting by defining the problem first you’re putting guardrails in my mind, investors like me hear so many ideas and pitches daily, please help us context switch and quickly wrap our minds around the problem that you’re solving from the very beginning of our conversation.
2. Are you smart?
Investors are always trying to figure out if and how you are cleverer on more than one axis. I want to understand what makes your startup uniquely clever and hopefully in more than one way, maybe you’re working in an area ignored and overlooked by many because it’s boring, you know what, boring can be great, I may find out that you’re clever because you’ve come up with a new algorithm, device or formula that’s truly unique and hopefully protected by some form of IP, maybe I’ll also learn that you’re clever because you found a way to grow your audience and acquire customers at an order of magnitude lower costs than everyone, please keep this in the back of your mind when you meet with investors, talking about the plans and USP’s will demonstrate that you’re clever and hopefully in more than one way.
3. How well you assessed your competitors
The third thing I wish you knew is that you should know a tonne about your competitive landscape and which of your core differentiators and benefits are truly most important to your target customers. I see so many startups get tripped up when it comes to talking about the competition in detail and why customers will choose their solution, startups threw up a magic quadrant and get torn apart when they don’t really know what benefits are most crucial to their target customers and why and how they’re going to win. When it comes to the competition I want to figure out if you have your head stuck in the sand or you really know the competitive landscape and have a firm grip on your differentiated benefits that means I better not be able to do a simple Google search and come up with a strong competitor that you’re not even aware of.
4. GTM Strategy
I really wish you knew how much investors want to see that you have a focused, scalable and thoughtful Go-To-Market strategy, I see so many startups means that doesn’t really even know what that means, most startups think I’m asking about their sales strategy for example direct online B to C or B to B, but I’m not, I want to understand the key attributes of great early customers or markets that you’re going after why those attributes are important to your strategy and what markets you’re going after in priority order at the end of the day it’s very important for investors to understand how you’re going to gain traction quickly and efficiently.
5. Revenue Projections
I hate to burst your bubble but I wish you knew that the cards are completely stacked against you when you talk about your projections, most investors won’t believe your revenue growth projections as we assume you’re guilty of revenue projection crimes, I would say well over half of the startup founders present highly inaccurate revenue projections, of course, they start with the obligatory by the way it’s important to point out that our revenue projections are highly conservative when actually there anything but how do investors figure this out? we start by asking questions that peel back layers of your assumptions to see what’s behind your thinking and forecast, most of the time we find the emperor has little to no close. We ask detailed questions about your pipeline, sales processes, conversion rates, how long it takes to close sales and more under this level of scrutiny we usually see most startups do a face plan, so do yourself a favour carefully, think through each stage of your sales process and the critical assumptions you’re making along the way and make sure to work with someone who will openly challenge your assumptions and make you defend them in detail then redo your bottoms up sales forecast.
Start with the big and urgent problem you’re solving, we want to make sure your start-up has a pulse.
Tell us how you’re being clever hopefully in more than one way.
Know your competition in detailed and how you stack up against them from the customers perspective.
Make sure to have a Go-To-Market strategy that’s thought through makes sense and is scalable.
You need to have solid revenue projections built bottoms up with pressure tested assumptions.