Pitching to Angels and VCs

Best way to get in is through entrepreneurs’ reference Investors trust people they’ve backed in the past Usually know within 10 minutes Prefer founding CEO and with a team of founders Don’t approach VCs that are funding competitors Angels are ok – often invest in several companies within the same industry

Approaching Investor

Don’t expect a “Yes” after the first meeting Build a relationship with the investor Don’t send a long email / business plan If you have no reference, it will take a month of interactions (in-person and email) The more time you spend with an investor, the more likely he is to invest in you The goal of each meeting is to get the next meeting Be patient

Approaching Investor

Before the Pitch Skip the associates and go straight to partner level Don’t ask investors to sign NDA Learn the VC language – KPI, business models, term sheet language Create your pitch deck Practice your pitch in front of peers and other entrepreneurs Be confident not arrogant

Use simple bullet lists 45 min presentation, 15 min Q&A Show a demo Iterate after every pitch

Creating the Pitch Deck

1. Problem

2. Solution/Demo

3. Market Size

4. Traction

5. Team

6. Competition

7. Business Model

8. Funding

Standard Pitch Structure

Don’t be late; arrive early to setup Bring equipment and backups (cables, adapters, USB drive, etc.) Don’t show up alone; bring 1-2 team members Give each person a role; investors want to see good teamwork

Logistics

During the Pitch

These are the factors investors look for:

Traction Team Social Proof (who else is investing?) Product Market Many entrepreneurs fail to highlight the team Investors prefer an A team with a C idea, over a C team with an A idea

During the Pitch

Entrepreneurs often forget to fully discuss the problem and skip straight to the solution If you have a clear problem, it is possible to pivot if your solution fails If you only have a solution, the entire company falls apart

During the Pitch

Don’t go overboard on numbers and projections Don’t hide or downplay the competition Emphasize what makes you better or unique Don’t be too attached to your business plan; show that you are open to new opportunities

Don’t show up without a demo or mockup Don’t be afraid of running overtime on the demo especially if the investor shows interest Don’t point out problems/bugs in your demo, just move on Most importantly, be passionate about your product

Demo

Valuation is not a science, based on supply-and-demand in current market Your company is worth as much as you can convince investors its worth, be ready to justify your price

Valuation

Q & A Take notes during the meeting Don’t mention which investors have rejected you Don’t dodge questions, answer directly and honestly Investors will only invest in people they can trust

After the Meeting

Send “Thank You” email on the same day Prepare for rejection