As Steve Barsh, Managing Partner of Dreamit Ventures, once said:
“You only have a few minutes to catch an investor’s attention.”
Businesses everywhere have been impacted by the 2020 global pandemic, and in the time of COVID-19, the concept of funding is daunting for many founders. With social distancing and quarantines in effect around the globe, social norms have been completely disrupted.
However, just because in-person contact isn’t allowed doesn’t mean that pitching to investors is an impossible feat. Conversely, pitches have now moved in the direction almost everything goes in our digital age–online. Enter: the video pitch.
Navigating a new fundraising landscape
When a company seeks funding, founders typically travel to areas that have a high number of investors, such as Sand Hill Road. Founders will often spend days in these investor-dense areas, jumping from one boardroom meeting to the next. The goal is to set up as many face-to-face meetings as possible with interested parties in order to raise money.
COVID-19 has sparked a potential turning point in the fundraising landscape, however, by further propelling the concept of video meetings. Most of these meetings are held via Zoom, a video conferencing app aimed towards businesses. The app reached a valuation of $1 billion by January 2017 and climbed to $16 billion by April 2019, but 2020 put Zoom on the map. While employees around the globe have been confined to their homes, Zoom has been a way for companies to stay connected.
Previously, popular belief was that video pitches were fragmented and awkward–but that belief is changing, thanks to investors and seed money startup accelerators such as Y Combinator.
Since 2005, Y Combinator has funded over 2,000 startups and is now a community of over 4,000 founders. Their companies have a combined valuation of over $100B and include names like Airbnb, Stripe, Dropbox, GitLab and DoorDash.
While more than 25 of their companies directly respond to the COVID-19 crisis by dedicating resources to find treatments and vaccinations, Y Combinator has simultaneously focused its attention on new startups that need to raise capital during this time.
Not to be stopped by a global pandemic, YC moved their famous Demo Day online: transitioning a multi-stage event of 200 companies vying for the attention of over 500 investors to a gallery of single-slide decks online–only weeks before the event.
As a company whose aim is to help startups succeed even amidst turbulent times, it’s only fitting that we spoke to YC partners about pitching via Zoom. So if you are aiming to make big moves even while quarantined at home, here’s what you should know.
Advice from the YC community — How to pitch investors over Zoom
Advice from Yuri Sagalov, former YC Part-Time Partner
Yuri Sagalov is a founder, entrepreneur, advisor, and angel investor. When asked his thoughts on pitching to investors over Zoom, he gave the following advice:
(Note: This advice not only applies to those pitching to investors, but also those who aim to do sales over video now and into the future.)
Get a good webcam. A good camera is imperative. Although it may be challenging to source a good webcam at this time (many are sold out), you can also use an old DSLR camera with clean (devoid of onscreen data indicators) HDMI outputs, which will often result in a better quality picture. However, you’ll need an adapter that converts the HDMI output to a webcam input, such as the Elgato Camlink or the Elgato HD60 S+. Check to see if your current camera is supported here.
Don’t forget about your microphone. Your pitch needs to be clear and concise, which is why a good microphone is so important. Always complete a sound check prior to any pitch. In addition, do not rely on your laptop microphone–it will pick up on background noise, including the sound of you typing notes. If you’re using AirPods, make sure they don’t die during your call and/or or have a backup handy.
Look professional. You may be quarantined, but that does not mean you should not remain mindful of your appearance. While a button-down shirt or blouse is not necessarily required, first impressions are always relevant.
Additional tip: Consider getting a cheap greenscreen. This small investment can make you look a lot sharper.
Plan a backup internet connection. When everyone is online, the internet can be unreliable–Yuri’s Comcast connection has cut out numerous times. Tethering is fine, but you’ll need to be ready to switch over on short notice. (Yuri has been able to switch to tethering off his phone in under 30 seconds.) When using Zoom, you won’t need to restart the conversation–you’ll automatically reconnect.
Try to build in breaks. Pitching over video is harder because figuring out the conversation cadence without in-person cues is difficult. If you plan for breaks in your pitch, this will provide an opportunity for the investor and/or person to whom you’re selling to ask questions.
Be mindful of your tone. Your voice tone matters much more because you've lost most of your body language, especially when you are screen sharing slides. You have to rely on your voice to punctuate key points, so make sure you're not speaking in a monotone voice. Use intonation to help cue your audience as to what is TRULY important–just as I'm doing with capital letters in this sentence.
Keep your pitch short. It is easy for people to get distracted, start browsing the web and doing other things if you're just droning on. As a result, your pitch has to be that much more engaging and conversational–keep it short, sweet, and ask questions throughout.
Advice from Dalton Caldwell, YC Partner
Dalton Caldwell is an entrepreneur and technologist, as well as a YC partner. After listening to hundreds of video call pitches, here’s what he had to say:
Read your audience. Dalton explained that the single greatest mistake he has seen in video meetings with founders is their lack of insight in regards to an investor’s engagement level. If you are unable to tell when an investor is engaged and interested in what you have to say, you will miss the mark.
Try to keep your nerves under control. Unfortunately, being nervous can worsen your ability to connect with the investor(s) you’re pitching to, so be sure to rehearse. You will likely ramble if you’re nervous, which can bore and frustrate those you’re pitching to.
Keep the investor engaged. Whether you are pitching over video or not, the investor will be saying just as much as you in a good meeting. Your goal is therefore to keep the investor engaged. Dalton suggests that after every major point, pause and ask whether or not your point makes sense. To do so, be prepared with a list of questions that you can ask in order to break up the conversation. After all, the last thing you want is for your pitch to sound like an online lecture.
Meeting investors and pitching in front of a camera instead of a person is not an easy transition. But although pitching on Zoom and other video conferencing platforms poses its own set of unique challenges, there are also a lot of advantages. This is your opportunity to invite an investor into your space, so embrace the intimacy and use video meetings to your advantage.
Above all, make sure you’re prepared–not just in terms of your verbal pitch, but your overall presentation. Remember, investors see thousands of presentations a year. If you are going to stand out while pitching on Zoom, you’ll need a pitch deck that stands out.
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Krista graduated from the University of Guelph where she studied psychology and neuroscience. Still active in her research, she now focuses on all aspects of health — both mental and physical. Based on her strong research skills, she is confident in a wide range of topics. Her specialties are health, nutrition, neuroscience, and business. She also owns a small business, which is most certainly her creative outlet!