Raising venture capital (VC) demands precision and strategy. Knowing how to successfully pitch to VCs would be important for the growth and success of many startups. After all, today venture capital has become a key financial driver behind startups in almost every vertical and industry. Earlier, Anand Jayapalan had spoken about how whether or not a company receives VC funding to scale and operate heavily relies on what happens during pitch meetings. Hence, startup founders need to try their best to convince investors that their business is an excellent investment.
Here are a few tips they may follow:
- Explain the opportunity in the first five minutes: The very first rule of how to pitch to VCs is to put emphasis on the most vital details. Within the first few minutes of the pitch, the audience must have a clear understanding of what the opportunity is and how the VC founder plans to take advantage of it. There would be more time to go into its details during the rest of the pitch.
- Avoid reading from the deck: The deck is supposed to be the visual aid that helps startup founders with their pitch, it is not the pitch itself. Investors look for proof that the entrepreneur actually knows their business and the market they are addressing. Hence, it is better to avoid using the deck as a crutch in the pitch meeting.
- Focus on the team: VCs do not simply care about the startup founder, their market and ideas. They also want to see if the startup team has the capacity to execute the vision of the founder. Hence, startup founders must promote their teams and make the VCs feel excited about them. For a startup founder, having the ability to build and maintain a solid team is one of the most vital skills they can show to investors when doing VC pitching.
- Be bold and ambitious in the view of the future: Being a startup founder involves having a vision that is grounded by practical decision making. They must expect the VC investors to ask detailed questions about the goals of the startup and the plans to achieve them. Hence, the founders need to be proactive about laying down the vision for the future, and back it up with an actionable plan.
- Be specific about the potential market: The vision of a startup founder might be substantial, but their understanding of the market opportunity should be specific and detailed. It is imperative to show the investors that one has already thought through which segment of the total market is right for their company, and have a plan to capture it.
- Know the competition: A competitive analysis is a vital aspect of every VC pitch. If one does not know who their competitors are, they are quite unlikely to be able to compete against them in an effective manner. Hence, when doing VC pitching, startup founders must be prepared to speak to the audiences about the competitors from an informed position.
Earlier, Anand Jayapalan had mentioned that when thinking about how to present to venture capitalists, it is better to practice the pitch before hand in front of people who have experience in both giving and fielding investor pitches. This would help the startup founder to become more confident in their pitch.
