Fundraising and pitch-deck tips from venture capitalists
Fundraising is always a stressful time. You’re taking time away from your business to get the funds you need to grow (or keep the lights on) and every day spent fundraising is a day you could have closed new sales, or improved your product.
The heart of most fundraising is a pitch deck: The quintessential Silicon Valley document, borne of Sand Hill Road boardrooms and investor Demo Days.
Over the last few years there’s been continued growth in the number of new tech startups created and also a trend for larger seed raises for a smaller number of companies. This has increased the competition for fundraising, and we’ve seen it drive up the design quality of pitch decks.
At SketchDeck we work with hundreds of entrepreneurs and business teams each year creating pitches for businesses and services. We reached out to investors in the Y Combinator community and they kindly offered the following advice for those preparing their next pitch.
Practice, practice, practice.
Guga Gorenstein, co-founder and CEO of BXBlue said this about practicing:
"The best hack about pitching is to practice - really practice a lot. Like athletes that exercise and repeat a thousand times, getting the message right, takes a lot of practice and course correction. Your pitch can become 100x better with practice."
We know from personal experience how true this is. During our first fundraising (at Y Combinator Demo Day) we practiced constantly over the two weeks preceding the big event. We pitched to the different partners (who are essentially investors) repeatedly, and our pitch constantly changed as we incorporated their feedback.
It was a hectic, exhausting two weeks (the offices became a cave of pizza boxes) and deeply transformative for our pitch’s clarity.
A note on feedback – different people will have different feedback and some of it will conflict. Sam Altman advised us on this note:
“You have to find the people whose feedback most resonates with you and work with them. If you try to incorporate everyone’s feedback you’ll go in circles.”
A trick we and our colleagues have often used is to pick out investors (or clients, conferences, as appropriate) that are not your highest priority, and pitch them first, a week before the rest. The experience of pitching them and any feedback offered helps shape the pitch for your top prospects.
Land and expand
Alexander Mistakidis of Pioneer Fund stated this about summarizing presentations:
"Land and expand your pitch meetings. Start with a very short and clear deck to present, and then afterwards have appendices prepared to help have deeper discussions with investors. Each investor has their own perspective, so put the common info up front, and then allow them to follow their curiosity.
If you put too much content in the initial pitch, you greatly increase the work on your end to make it completely clear and compelling. It's a lot easier to have a great pitch conversation than to have a great 20 minute lecture."
As well as evaluating investments for Pioneer Fund, Mistakidis is also the CEO of Gamelynx, which creates easily watchable competitive games and gaming websites like Gamehub.gg.
We often see clients creating a suite of different docs - a short high-level deck, a detailed presentation with lots of business statistics for later conversations, one-pager overviews of the proposition and even infographics.
You have to tell a story
Andrew Ng of SignalFire said this about telling your story through your presentation:
"Narrative and storytelling is super important, focus on team, point out progress/de-risking from the last time you were out in market, highlight 3-4 key things that you want to get across in your pitch and make sure they stand out."
Sometimes when building a pitch deck it’s easy to get deep into the models and business statistics, and lose sight of the central character to the meeting: your story. In a typically short (20 minutes to an hour) initial meeting, the arc of your story and the salient points to leave behind are what needs the finest polish.
Focus on what is most compelling: Team, Product, Market and Traction
Jared Heyman of Rebel Fund had this to say about managing your focus of your pitch deck:
"When I was a founder, I was often frustrated by how short VC attention spans seems to be and how little they could appreciate the complexities of my business. Now that I’m on the other side of the table investing in dozens of startups, I understand why: VCs have to read a massive number of pitch decks each week.
So, if you want your deck to stand out and be memorable to investors, focus on just a few of the most compelling aspects of your startup. Almost all VCs care about the same 4 things— Team, Product, Market, and Traction— so be sure to choose the most impressive aspects of your startup in these areas."
Rebel Fund leverages data science and Silicon Valley’s most accomplished founders to invest in a diversified portfolio of Y Combinator startups. The fund’s investing process is supported by a team of top Y Combinator alumni who have founded multi-billion dollar technology companies along with a proprietary machine-learning algorithm to validate and screen potential investments.
The final slide
A lot of the above advice can be summarized “Focus on what is most compelling”. A thirty-minute meeting is much much shorter than it sounds, and your goal is to have one good conversation that interests and excites the investors you are with.
We’ve a bunch more resources for pitching:
Enjoy, and may you have swift and successful fundraising!
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