Picture a parade of a dozen or two founders delivering 2 to 3-minute pitches in front of a packed room of investment firms. The partners at those firms are sitting on folding chairs while rocking their fleece vests or branded T-shirts. They are in charge of deploying capital they raised from their limited partners, and EIF.
Their pitch comes in the form of an investment thesis, which should, in theory, lead them to invest in top global founders. Around 3/4 of them will fail to deliver the promised returns to their limited partners. The accelerator that invited them there is hoping that their own ‘spray and pray’ strategy would yield an exit with enough VC fuel pumped into the companies.
That is the essence of a demo day. Except now, it’s done in a virtual space. That and the VCs find it more difficult to pretend that they’re there to listen to the pitches. After all, one of the main reasons they’d show up was to network with each other.
For the founders, it means that the associates who now show up to listen to the Zoom pitches are more likely to be a captive audience scouting for deals.
What follows is a ‘starter pack’ for those preparing to pitch in front of them.
1. Tell me what you do
Skip the buzzwords, hyperbole, acronyms, or jargon. Is it software, hardware, a consumer good, an app? For whom?
2. Tell a true story
How did you discover the pain of your customer? If you’re good, the story will answer the dreaded ‘Why you?’ question without sounding try-hard.
3. Show that the pain is shared by millions
This is the time to show your market size while not sounding like an economist.
4. Focus on the value of your solution
How does it help your customers? Please show that it’s a ‘painkiller’, yet don’t ignore the gains it brings to your users. If you feel like your pitch is turning into a product-centric one, then it’s time to ‘murder your darlings’, and edit.
5. Tease your traction
Build on the previous market data to zoom in on an example of a player operating in it. Share that you’re partnering with them or signing them as a customer.
6. Show me the money
This comes in the form of a business model slide. The point here is to introduce it. Is it a ‘freemium’ model that’s geared towards growth? Are you focused on exploring which of your business customers has the greatest lifetime value? See cohort analysis.
You do not need to educate the audience on your byzantine pricing models.
7. Show me that you’re a battle-tested team
Has your team worked together at a previous company? Do you have any exits? Does your team have leading experts in their respective fields? Do you have what it takes to scale from 10 to over 500 people?
The point here is that you’re treated as an asset. This even more so in the absence of significant traction.
8. Build relationships at an early stage
In general, don’t try to fundraise during a 3-minute pitch. The point is to get to know each other and to establish a connection beyond the LinkedIn add.
9. Look up the fund you’re pitching to
Try to get a warm intro from a founder in their portfolio or an investor they share a cap table with.
10. Write down a 400-word script–by hand
The goal is to avoid racing through a sales or product pitch. This is investor relations, not an expo. Keep it measured, authentic and cool.
11. Write down tough questions, and then answers
A pitch is followed by a Q&A session. Think of it as a stress test or an early filter. The point here is to be able to answer the FAQs without sounding like a first-time founder or a know-it-all nerd (spoken from personal experience).
12. Practice with your peers
Don’t be a lone wolf. Ask and listen for feedback. Other founders can be great for this. Don’t ignore the opportunity to get better.
13. Sleep, drink water and breathe
Seriously, don’t pull an all-nighter when preparing your pitch. You’ll pay for it during the Q&A. See ‘How to survive the first 3 minutes of your talk’ for more on the subject.
14. Keep your slides clean
15. Mind the tech
See my other ‘Pitching Online’ piece for more practical tips on all things related to software and hardware. At the very least, test your download and upload speeds, and then get a cable for your connection. Do it now.