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Pitching your startup to a venture capital (VC) investor can be intimidating. You are talking to exceptionally smart and successful people in a competitive market. According to Statista, 2021 set a new record for venture capital investments in the United States with approximately $330 billion invested, nearly double the previous year. You’re competing against a crowd of smart founders and amazing ideas. How can you best set yourself up for success?
Consider the VC perspective. With such a wide range of investment opportunities and pitches, VCs typically have a set of criteria they look for to help them evaluate an opportunity. Think about what you would want to know as a potential investor and build your pitch from there.
Even startups with great ideas can tear the issue apart before it even gets started. Consider the following questions as you prepare your next presentation.
Related: How to Sell Your Story Through Your Pitch Deck
What problem does your startup solve for consumers?
Investors want to invest in innovative products or services with long-term competitive potential. Successful presentations share solutions to real-world problems that have not yet been solved by other companies in the market.
Consider who absolutely needs to own or use your product. Are you offering something consumers can’t do without? What makes your product different and better than others? Are you giving people a compelling reason to change their current habits? If consumers are currently using a different product or service, why will they switch to your idea? Think critically about the answers to these questions and include them clearly in your presentation. Answer the tough questions for investors before they ask them.
Why is now the best time?
Investors are likely to want to know why now is the best time to invest in you, both from a market perspective and the current stage of your startup.
Investors will need to see that your target market is currently important enough to generate a large return and ensure that you can capture a substantial portion of that market. Why will your idea work now and why hasn’t it worked before? Showing that your business will target an existing market opportunity is crucial to getting the attention of venture capitalists.
In relation to time within your organization, VCs will need to know what growth and revenue milestones you will reach and when you will reach them. They will also want to see evidence that the business is viable, with traction in your core market.
Be prepared to provide this information to investors on a detailed and realistic schedule.
Related: How a VC wants to be presented
What makes you the best leader for your idea?
Your story simply needs to feature prominently in any successful presentation. At this stage, VCs are mostly investing in the people behind the idea. A strong and determined leader with a clear vision of his idea is essential.
Include proof of your previous success in your submission. In addition to a proven track record, VCs want to see confidence in your field. Prepare your presentation to showcase your best attributes, such as your drive, passion and presence.
Transparency is crucial throughout the submission process, but especially now. It’s okay to be vulnerable. No entrepreneur is strong in all areas; it’s best to be honest about your weaknesses and plan to hire strategically to help fill those gaps.
Also, demonstrate your coaching ability on your pitch. Be open to listening to the VCs who advise you and your company – they are successful for a reason.
Related: Everything you need to know to pitch an investor
Do you have the team to execute your vision?
In addition to you as a leader, VCs need to see the executive team as a whole. Be prepared to share that you not only have a unique idea, but that you have the right team to make it happen.
Be prepared to talk about your team’s experience and share a list of qualified and capable people who will play a key role in the company’s development. If you don’t already have this team, be prepared to share a comprehensive recruiting plan. Also, VCs want to see that your team is determined to overcome the challenges ahead, with a shared vision of success.
Addressing your team balance is also crucial. Do you have a marketing expert? Product guru? Sales leader? Address existing imbalances in team experience and be prepared with a plan to fill those gaps. Show that you are a smart and strategic founder in the way you build your core team. Remember, VCs aren’t just investing in your business, they’re also investing in people.
In the end, perhaps the best way to prepare for a pitch meeting is to put yourself in the shoes of your potential investor. Think about what you want to know before you invest in a company and answer these questions clearly in your pitch.