6 Lessons on How To Pitch for Venture Capital

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By Sonia Sahney (Participant, Founder Labs) I’d like to share 6 lessons I’ve learned about building a compelling pitch for VCs, many of which were not initially intuitive to me.

Lesson #1: Use pictures, not words --

This may be counterintuitive to former bankers and consultants, but VCs expect a story with pictures and speak to ideas. They don’t like a lot of text on a slide. Here’s an example of a consulting slide (BAD). Here’s an example of a VC-worthy slide (GOOD). Obviously I’m making a broad generalization and the image I’ve labeled as "good" would need to be weaved into a cohesive story, etc.

The point I’m trying to make is that your pitch shouldn’t feel like a book report; it should be exciting and visual. You don’t need to write your points out in bullet or table form on a page; you should be able to speak to your key points without prompts. Lesson #2: Explain why you and/or your team has unique market or customer insights -- Ann Miura-Ko from Floodgate explained this in the context of her decision to invest in ModCloth. The week, she met the founders of ModCloth, a number of companies came in pitching similar fashion start-up ideas. However, these other teams weren’t able to convince her that they had any advantage in understanding the fashion market or the fashion customer. When she asked these companies what fashion magazines they read, they weren’t able to convince her they knew what they were talking about. She contrasted this with the Susan Koger from ModCloth. Susan came in and made it clear she had been vintage shopping since she was 13, and that she clearly understood the community of vintage buyers and their needs.

Figure out for your idea what your personal competitive market/customer insight advantage is -- and find a way to explain this in your introduction. Don’t force this, be authentic. VCs see hundreds of pitches a day and will sniff you out if you’re faking it. If you don’t have a unique competitive market/customer insight advantage, you may want to start recruiting teammates who do.

Lesson #3: Be a "thunder lizard" --

This is another piece of advice from Ann Miura-Ko. VCs want to invest in billion dollar ideas, not million dollar ideas. So make sure you can explain why your target market and your ambitions are big.

Lesson #4: Team dynamic matters --

If multiple people present, make sure that your hand-offs are smooth and that you have talked with your team beforehand and can answer tough questions (e.g., how equity will be split, who is the CEO). In one of our mentoring sessions, Jim Robinson from RRE actually tested us on this. He wanted to see how we had worked through potentially contentious issues -- so he asked us who came up with the idea for our company name, and then later on explained that he primarily asked to observe how we would answer.

Lesson #5: Be energetic --

You need to convey passion. Seems obvious, and I don’t doubt everyone goes into a pitch trying to be passionate, but sometimes things don’t go over quite how you plan. Try videotaping yourself doing your pitch and watch the playback, it really helps! I didn’t realize how much I clasped my hands, or nodded my head in agreement to questions until I saw it on replay.

Lesson #6: Brevity is appreciated --

Be brief. If you can’t sell someone on your idea quickly, you’re doomed.

Here’s a 9 point structure for pitch decks from Shaherose Charania (our fearless leader, Founder and CEO of Founder Labs and Women 2.0). I’ve found it really helpful, so I thought I would share her wisdom with you as well:

  1. Team intro -- Focus on why you are so amazing for this team, seriously sell yourselves.
  2. Who is our customer -- Use an image, put a few key points.
  3. What is the problem they have? -- Define it CLEARLY, and if you are tackling one part of a larger problem for your Minimum Viable Product (MVP), state that.
  4. What is the solution we offer? -- Demo your MVP.
  5. Opportunity -- How many customers have this problem? What is the market you are going after, show a big number) + where are you relative to the competitive landscape (show how you are different)
  6. What did we learn from customer development
  7. What does it look like - MVP DEMO (if not complete in slide 4)
  8. How will we make money? -- Biz Model in a few words.
  9. Next steps

This post was originally at Founder Labs website.

About the guest blogger: Sonia Sahney is currently Co-Founder of Smarketplaces. She is a former engineer and a semi-professional shopper (10,000 hours+). This combination has fueled her passion for the intersection of digital and retail. Sonia graduated magna cum laude with a mechanical engineering degree from the University of Michigan and holds an MBA from Harvard. Follow her on Twitter at @ssahney.