When you’re in the shower acting out the business pitch you’d make on Shark Tank (don’t lie, we know you do that too), you might not be thinking about the many things venture capitalists look for from founders.
It’s about much more than a good idea: VCs are looking for founders and companies that will not only — hopefully — provide a return on their investment, but also that will make for positive long-term partnerships.
That’s why founders need to be ready to rise to the challenge of crafting the perfect pitch, capturing the attention of VCs, and securing a deal.
To give you the lowdown from the other side of the pitch deck, we sat down with Lolita Taub, general partner at Ganas Ventures, and Gale Wilkinson, founder and managing partner at Vitalize Venture Capital, who shared their collective wisdom on steps to making the perfect pitch:
1. Shoot Your Shot
The very first step to raising funds is simply making contact with VCs. If you’re not part of a formal startup accelerator that brings investors to you, you might need to work for leads yourself.
We know that no one enjoys writing a cold email, but if it could mean securing funding to get your company off the ground, it’s worth a shot.
Wilkinson suggest founders use one of three ways to get in touch with potential investors:
Work within your personal and professional network to see who can refer you to a venture capitalist
Send a social media message directly to a venture capitalist you think would be a good fit
Craft a high-quality, personalized cold email to VCs
2. Structure a Strong Pitch
If you’re firing out cold emails, they had better pack a punch. That’s where your pitch comes in.
“Really good pitches have a clear one-line value proposition from the jump,” says Wilkinson.
She recommends that pitches:
Highlight why the founder is the perfect person to run the business
Showcase a product that has intuitive and beautiful design
Include key traction points such as users, revenue, partnerships, investors, and growth
Make a clear ask in terms of dollars and valuation
Founders should always have a short elevator pitch ready in their heads (you never know whom you’re going to run into) as well as a longer, more detailed pitch to send in writing.
Plus, make sure you’ve done your research when it comes to investment amounts and valuations: You don’t want VCs laughing you out of the room for a far-out ask.
3. Capture Interest
While having a clear ask and a stellar pitch is pivotal, so is the storytelling component of pitching.
First, make sure to do your research on each individual firm, making it clear that you’re interested in a VC’s specific track record and expertise rather than just a blank check.
Second, founders need to make venture capitalists truly believe in their mission, whatever that may be.
“When founders pitch to me, I’m captivated by their ability to clearly identify the market they’re targeting, articulate the problem they’re solving, and highlight their unique edge in solving it,” says Taub.
Be able to go beyond pitch-deck bullet points to dig into the why behind your mission. Plus, you should be strategic about your outreach, staying on top of current global events and tying them in where appropriate.
“Timing is crucial, too,” says Taub. “If founders can demonstrate that their solution aligns with current market trends, it catches my attention.”
4. Be Your Best
“I love working with founders who are so passionate about something that they will stop at nothing to fix it,” says Wilkinson.
Actions speak louder than words, and Wilkinson says the best founders:
Have a clear five- to 10-year vision
Have the ability to execute quickly
Can find and synthesize information quickly
Can ship a product fast and iterate on a tight pattern
Are organized, trustworthy, and have good communication skills
Can take criticism
Taub similarly says that effective communication, collaboration, and leadership skills are among the most important traits founders can possess.
“I admire founders who show unwavering determination, a strong work ethic, and the ability to adapt in the face of challenges,” she says. “I also look for founders who genuinely care about their mission and are dedicated to building and nurturing a supportive community around their startup.”
5. Don't Quit
If you try and don’t succeed… you know the rest. Taub recalls instances in which nos turned into yeses and founders were able to change her mind about investments.
Her tips for trying again:
Be willing to pivot based on feedback and actively seek input
Listen to customer needs and make data-driven decisions
If founders are able to pull these things off, “it significantly influences my perception of their potential for success,” says Taub.
In the end, it’s important to remember that venture capitalists are also business people with bottom lines, goals, and fears, and not the untouchable judges we sometimes make them out to be.
As such, it’s important to appeal to their humanity and use compelling storytelling to help others understand your company’s mission.