Standing in front of a venture capitalist is not that easy. But, of course, there are some ways to make it smoother. Especially when you start to understand that it’s not about getting the money you need but talking sincerely, openly, and straightforwardly with the venture capitalist.
We know that maybe saying that money is not the star when you meet with a venture capitalist is, at least, a little controversial. If we go deep and answer “What is venture capital investing?”, we’ll find answers that mainly define it as a type of investment that has two main actors: an investor and a business that needs the capital.
In this article, we’re going to focus not only on explaining our point of view but also on giving you some advice to prepare your venture capitalist presentation successfully. You’ll find all you need to know to get ready for your pitch.
Maybe when people think about venture capital they think about getting the money they need to start their project. But what are the different stages of venture capital? The truth is that this kind of investment goes beyond the seed stage.
Venture capital can help entrepreneurs in the early and large stages too. Early-stage capital is mainly used for activities like development, marketing, and sales. While later-stage capital is focused on supporting expansion, product improvements, huge marketing campaigns, acquisitions, and more. Note that the last one is provided after the business has produced revenues.
That quick overview across all the stages in which venture capital can be used might give you a little sneak peek of the different roles this investment can play in a startup. But let’s get inside some of the most common ones.
Venture capital can support you when you need to increase your business activities and, therefore, build better business dynamics to unlock more income. This kind of funding can be useful to boost business potential too. For instance, paving the way for scaling the startup.
Since it’s really important how others look at your startup and what they think about it, venture capital can help you with that too. On one hand, it smooths banking trust. Having venture capital funding means having the trust of investors, and this strengthens banking trust too. Banks will look at your startup in a new light—a more trustworthy one. Plus, it can be used to boost your marketing too.
A common scenario that takes place when entrepreneurs pitch to venture capitalists is that they arrive at the meeting, put on the deck, and start talking and talking about the company following each line they have rehearsed.
This entrepreneur explains only the good stuff about the company, for sure. If they are lucky, maybe the venture capitalist keeps an eye on the deck for a few minutes—if the deck doesn’t have too many bullets. If they are not that lucky, the venture capitalist will start looking at their phone.
Picture this: venture capitalists are used to having a lot of pitches. Maybe when it’s your turn, the venture capitalist has already had a lot before yours. Plus, the investor will be able to kinda know what to expect from your pitch because pitches tend to be biased. This means that probably your focus will be on how great your company is, and that’s ok because who wants to talk about the hard stuff or the things that don’t work well?
That’s where the new spark-a-conversation approach comes in. Since the venture capitalist knows what to expect from your pitch, you need to see your pitch as a way to start a conversation because it’s in conversations where the investors make their final decision.
During a conversation, a real conversation, you can create a connection with them. You can talk openly about your business and your team, and show how much you know about the industry. Maybe you can even discuss the processes and results you like and the ones you want to change.
So, your pitch shouldn’t get your funds, it should be a conversation starter. Because it’s in conversations where you can finally get what you need.
The conversational approach doesn’t mean that you don’t have to bring a deck to your pitch. That’s why we want to share with you some keys to take into account when preparing your deck for a pitch to a venture capitalist. We’re going to go point by point.
The cover must have the company name and contact info. You can add a slogan or sentence that describes what your organization does. This last piece of advice is especially useful if you’re in the seed stage.
The next slide should address the main pain points you’re solving. This is a great space to spark the conversation we talked about previously. Maybe you can bring in the venture capitalist to discuss the problem with you. Make sure both of you have customers’ shoes on. Plus, it’s a nice way to let them know that you’re really into the industry.
If you’re in the seed stage, you can show them what’s happening in the market at the moment and why your startup can deliver other kinds of solutions or even address some needs that aren’t currently being addressed.
Now that you’ve talked about the problem, it’s time to bring in the solution and the values that make your startup stand out among the others. Think about the benefits it offers, for example. Keep in mind that this slide should prove how you will make a difference, and how you improve or will improve your customers’ life.
It’s time to let the product prove its value. Including a demo can be really helpful. The venture capitalist will be able to try the product himself or herself. This is the most powerful way of persuasion.
If you don’t have a demo available, it’s not the end of the world. Design can lend you a hand too. For instance, you can include a video with a voice-over or even screenshots. The key is to keep this part of the deck visual. The venture capitalist should feel, taste, and truly get into your product.
Market size is, indeed, what matters the most, or at least a lot, to venture capitalists. Why? Because it’s the number of people that are buying your product or that are willing to do so. If you’re in the seed stage, make the most of this slide to calm the waters and prove that your product has an interesting market awaiting.
If you’re in the seed stage, this slide is for you to explain your go-to-market plan. It’s key that you show that you’ve thought in deep how to sell your product or your solution. Of course, it’s not just about showing it, you must have done that already.
Think about relying on your sales team, getting some support from a partnership, or even harnessing online marketing or organizing events. Let your creativity blow the venture capitalist’s mind.
But if you’re far gone from the seed stage, you should prove your growth plan. This should be clear: you know your customers, you know where they’re going and where to find them, and you’ll reach out to those who are not with you yet.
Talking about competition is really important. Not only to provide an analysis and the advantages that make your proposal unique but also to show that there’s a market and that you’ve been studying it deeply.
Plus, being in front of competitors can expand the knowledge the venture capitalist has about the industry.
Leave room for your team. Maybe you can even include this earlier. It’s nice to incorporate the faces behind all the stuff you’ve already accomplished with your startup. You can also add a photo and a small bio.
Don’t just talk about the heads or the C-levels, everyone should be included, at least briefly. Plus, you should consider diversity when building your team up, and prove at this point that you have the ability to get all the talent you need onboard.
The venture capitalist will be waiting for this section to arise. Financial projections can be key to deciding the investment. You should add in KPIs like revenue growth, customer count, and spending.
Those who are in the seed stage, have to be honest about subjects like the amount of money they need and when they expect to generate revenues. It is important to keep this visual too.
A summary is a nice way to end up your deck presentation. You can take advantage of this space to talk about how much money you’re earning, other investors that have already trusted your project, what your spendings are, etc.
At Eagerworks, we’ve worked with many startups at different stages, and we’ve supported them in their growth. Besides, we’ve developed our own product, and that gave us a very interesting experience when it comes to developing a business. Here we’ll enlist our main points to keep in mind based on our expertise:
1 - The first piece of advice when thinking about your pitching to venture capitalists is to keep it short. The “keep it short” rule has many senses. The first one is, maybe, the most obvious one: don’t use more than 15 slides for your deck. Keep it as visual as possible and get some help from spreadsheets and dashboards.
2 - A second one is related to the deck too. Never ever include more than four bullets per slide. Words can get hard to read and the venture capitalist might be more worried about reading them properly than actually paying attention to what you’re talking about.
Two more “keep it short” senses to go.
3 - Want the venture capitalist to enjoy your demo? Don’t spend more than five minutes on it.
4 - And last but not least: you must be able to explain exactly what your business does in 10 seconds.
But it’s not all about shortness. During the presentation, there are a few more things to consider.
5 - You must listen to what the venture capitalist says and asks. If they have a question, answer it right away. Keep this in mind: never say “I’ll answer it in the next slide” or stuff like that because, usually, entrepreneurs tend to forget and the question remains in the venture capitalist’s head.
6 - If you need to ensure that you have the venture capitalist attention, do it. Use sentences like: Does this make sense to you? Are you with me? Is there any question? And since we’re talking about making questions, take into account that maybe the venture capitalist won’t give you money but they can offer some help. Prepare some answers just in case the “How can I help?” question comes out of the venture capitalist mouth.
7 - And the key to it all: be transparent and humble. Show your weaknesses. Prove that you have the best team and you’re up to reaching out to the best talent too. Make sure your financial details are explained in-deep. Don’t leave room for misunderstandings.
Now you’re all set for your next pitch. In a nutshell, the most important points are making conversation and keeping it interesting and natural. At the end of the day, you must keep in mind that everything boils down to people connecting and collaborating to make something worthy for all the parties involved.
If you’re working on your tech product and want to go deeper in the last tech trends and technologies, you can have a look at other posts in our blog.