Sum of a Pitch: Getting the Mindset Right
Get Your Pitch Right – Pitch Deck Series, Post 1 of 3
Pitching your startup to investors is about taking them on a journey – specifically, your journey. The journey you took to arrive at this point in time, where you’ve discovered a problem that needs solving and have found the perfect way to solve it. Now, starting off with anything resembling a “When I was 6 years old, my grandma told me…” is probably taking it too far, so figuring out the balance between finding a narrative they will care about while still being to the point and impactful is the art you’ll have to master. The overarching objectives of the pitch are 3-fold:
Objective 1: Make them believe your problem is worth solving.
This is a complex world, with complex people leading complex lives in complex ways. Making an investor believe yours is the problem worth solving over all the other ones they see daily is no mean feat. Broadly speaking, what you’re aiming to do here is mitigate what VCs call “product risk” and “market risk” by showing 4 things:
- Your problem affects an overwhelming number of people, and that it isn’t going to go away anytime soon (#VCSpeak: you have a large and growing market)
- Current solutions to your problem are not just ineffective, but woefully so (#VCSpeak: you have a distinct competitive advantage)
- Your solution isn’t just a nice-to-have alternative, but rather is the perfect way to solve the problem (#VCSpeak: be a pain-killer, not a vitamin)
- You’ve done some testing in the market and can prove that there is a need for it (#VCSpeak: your initial traction has showcased the solution’s use-case and has established product/market fit)
Objective 2: Make them believe YOU are the only one who should solve it
You’re probably not the world’s foremost expert in your industry (if you are, pat yourself on the back and head on down to point 3), so they’re going to need proof that you’re the perfect choice for the job. If things go well with your startup, they’re going to want to know you have what it takes to build and lead a team, implement your solution effectively, execute on your vision with resolve and deal with the constant uncertainty of entrepreneurial life into the long term. Dig deep into your past, and scrounge up every piece of evidence that shows:
- You have deep experience within your industry (#VCSpeak: Domain experience), and have the professional or academic qualifications to understand the industry’s problems
- You’ve worked in similar companies (preferably startups) and know what it takes to build, motivate and lead successful teams (#VCSpeak: Leadership experience)
- You’ve worked on similar solutions and know how to go about building this new, revolutionary one (#VCSpeak: You don’t pose much Execution Risk)
Objective 3: Make them believe it’ll make THEM rich by helping YOU solve it
Investors love being part of the entrepreneurial journey. In fact, several of them probably started their careers in the same position you’re in now. But don’t kid yourself – in their role as an investor, they want to come out of this journey financially ahead of where they started. This is true for most Angels and every VC out there, and there isn’t anything wrong with that. You both need each other equally and knowing what’s in it for everyone at the end serves to align the expectations of all parties perfectly and helps avoid much heartache down the road. Prove that:
- Your plan to sell your product or service to your target market is sound, sustainable and scalable (#VCSpeak: Your Go-To-Market strategy has been tested, you have positive Unit Economics in that your LTV > CAC and these methods will eventually reach much larger markets with little or no change in marketing spend)
- You have a broader understanding of where your company fits in the long-term roadmap of your industry, and know the route to take to eventually provide a payoff to your investors (#VCSpeak: You have thought about potential Exit Strategies that will match or exceed the investor’s required ROI)
And that’s it. When all the points above cease to frighten you, you’re in the pitching mindset. Now get everyone else in the team up to speed, and start storyboarding.
What techniques have you used to get into the pitching mindset? Do you follow a very different process than the one I’ve laid out above? Let’s get to the bottom of this problem together by sharing any more tips, thoughts or experiences in the comments section below!