Pitch Do’s and Don’ts, from a 500 Pitch Coach by Andrea Barrica.
A few reasons you won’t raise money:
- Your business isn’t the right fit for VC (which is totally OK!)
- Your business could be interesting to VC, but you have nothing yet. Stop pitching, and focus on building a solid business that solves a big problem, getting customers, and assembling a great team.
- You’re not talking to the right investors, or you may live in a city without a mature ecosystem that supports early-stage companies, or…..
- Your pitch sucks, and you can’t tell your story on stage or on the fly.
I can help with the last one.
Building a great business is more important than a great pitch, but if you don’t know how to tell your story, you probably don’t understand what is most interesting about your business. This problem affects more than just fundraising.
The hardest part about pitching is that it’s not about you. It’s a delicate balance between being authentically who you are, but more so focusing on what is important to your audience. This is what I help founders understand.
My Most Common Advice To Founders
- Don’t start with slides. Avoid templates. There isn’t a magic order, and templates often create boring, clinical, unsuitable pitches. Instead, master this question: what is most interesting about your business? (Seriously, do you know what it is?)
- Traction, Team, Tech, Vision – in general, most startups will fall into one of these categories. If you have (impressive) traction, you have a Traction Story. If you have a great team with a previous exit or serious domain chops, you have a Team Story. If you’ve built interesting technology (read: not a mobile or web app), you have a Tech Story. The problem? Most people choose the wrong story, try to tell all the stories, or think they have a truly interesting Team or Traction story – when they actually don’t. If you have nothing, you’ll probably tell a Vision Story, which means that you shouldn’t tell a Vision Story… and that you better bring the personality! Hint: When you figure it out, de-emphasize everything else.
- Stop selling the product. Sell the opportunity. Sales pitches aren’t investor pitches. With investors, it’s simple. Increase greed; reduce risk.
- Benchmarks by vertical. Know what good traction means in your industry, like:
Marketplaces – 20% MoM GMV growth & 20% margin
SaaS – 20% MRR growth, <5% churn E-commerce – >10%MoM growth, margins, repeat customers, average cart size
Mobile – Engagement (# opens/day) especially if downloads/MAUs are early
Social impact – focus on business metrics first before you dive into your epic vision. Order is key. Win their wallets, then their hearts.
- Don’t. Be. Boring. When dealing with a skeptical crowd, bring up something interesting as soon as possible. Dave McClure loves the traction sandwich and bringing up #s ASAP. Some pitches start with a shocking statistic. If you don’t have #s, mention a team brag, accolade, famous investor, anything you can. The most memorable pitches surprise, challenge, delight, educate, and inspire.
- Less is more. Good elevator, good pitch. Let the short pitch (i.e. 60-90 seconds) constrain you in the best way. In an investor meeting, let your answers be brief. If you are dominating an investor meeting, you are doing it wrong.
- Cut out detail & marketing speak. 90% of pitches I hear for the first time have way too much detail about the product and product features (looking at you, technical companies.) Cut out:
Buzzwords like “disrupt”, fixing “broken” industries, “revolutionize”, “rockstar team”
Forecasts of any kind beyond YTD
Advisors/Investors (except REALLY famous people/relevant companies)
Section for use of funds (we know you will hire developers & salespeople)
- Tell a story, and master transitions. Stories and case studies allow you to make points and brag (humbly). You can always tell a great pitch by the strength of the transitions – how the founder weaves each section of their pitch together in a cohesive flow and story.
- Nail Differentiation, especially if you are in a crowded space. (Hint: you should be able to do this in 1-2 sentences.) Don’t waste time explaining what everyone already knows, especially the problem. If you are a logistics company, don’t go on and on about how big the logistics industry is after you say it’s $4T. We get it. If you are a food delivery startup, don’t talk about the problem of not knowing what you’re eating for dinner. Everybody knows. In reality, a) that’s probably not the problem you’re actually solving, and b) we probably already agree it’s a problem — we’re just not convinced your solution is solving it. The more niche, international, or underground your problem/market, the more time you should spend educating. (Hint: there are no straight answers here – you have to iterate on sample audiences, but see #14).
- Focus on what you have learned. What are your key learnings? Steve Blank loves to ask founders this during pitch competitions, and it’s because investors are interested in the real story, not the fake Silicon Valley TechCrunch success theatre version. They also want to know they are investing in a team who can fail, learn, iterate, and move quickly.
- Bottom up, not top town market story, as Guy Kawasaki has often talked about. Narrow TAM, and be specific. Big #s on a slide make bullshit sensors go off.
- Don’t forget delivery. Don’t memorize it word for word. BREATHE. Beautiful, simple slides might distract an audience a little bit, but you are the star.
- Your pitch is not your business. Get in your best mental position; work out any insecurities. Come to terms with the imperfection of your company. Ban wishy-washy, apologetic, “trying” language. All startups are lopsided in some way.
- Avoid pitch feedback whiplash and don’t try to please everyone. The most successful pitches are often polarizing.
How I judge pitches:
- Is the product and differentiation clear?
- Does this pitch communicate the best possible version of this company? (I won’t know this unless I dig in deeper with you.)
- Does this pitch teach me something, surprise me, or connect me to you as a person?
Read the original article by Andrea Barrica here. Click on “Tiếng Việt” on the menu for the Vietnamese translation provided by 500 Startups Vietnam.
Author: Andrea Barrica is a venture partner & EIR at 500 Startups, one of the world’s most active and global seed investors. She is passionate about emerging markets, social impact, and growing companies. Before 500, Andrea co-founded inDinero where she generated the first $1M of revenue in 9 months through referrals and her empathy superpowers.
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