Seven Years and a Thousand Pitches

Advice for entrepreneurs after many years as a VC

I have been a venture capital investor for seven years now. Someone once told that a venture capital career is three sevens: seven years to learn, seven years to invest, and seven years to see your best investments through. If true, I’m cresting to my second seven. For long I’ve tried to keep the “advice for entrepreneurs” pieces to a minimum because, frankly, what do I know? I’ve never raised a dollar from a VC myself. My own businesses were all “small.” But now, I think it’s been long enough that I can safely share a few pointers knowing that even seasoned entrepreneurs make the same sorts of mistakes again and again, which makes sense; most of them have never been a VC.

Explain what you do, clearly

The first is that an entrepreneur is so intimately familiar with their space and business that they use terminology and references to people, organizations, and concepts that are wholly unfamiliar to me. You know your business better than anyone and the instinct with familiarity may be to gloss over to the basic. Always use the “explain to a child, and have them explain back to you” test to ensure that there is a digestible version of your story coming through in your pitch.

The second cause is an over-reliance on buzzwords and marketing speak. My advice here is simple. Do not use buzzwords and marketing speak unless absolutely necessary to explain a concept. It would be reasonable to explain that your software runs on the cloud while your competitors only offer on-prem solutions. It would not be reasonable to assert that your business strategy is “big data in the cloud.” Those are empty words. Empty words make for an empty pitch. Don’t spend 30 minutes pitching nothing.

If an investor doesn’t understand your business, I can assure you that they won’t be too interested in whatever else you have to say. On the flip side, if an investor does understand your business, what you’re doing may immediately resonate with the right investor, and the rest of your pitch will be a breeze.

The story should be 10, max 15 minutes

You should never be struggling to get through your whole deck or story. If that happens, it means your deck is way too long. It’s much better to run through fast, sense a lack of interest, and cut a meeting early than to bore someone for 40 minutes or, worse, prevent an investor who is interested and engaged from asking questions and having a conversation. The former never leaves a great impression, and the latter could be a huge missed opportunity. If lucky maybe that investor will ask for a follow-up to dive in deeper, but the dirty truth is that you usually get one meeting to really pique someone’s interest.

In an ideal meeting, you’ll spend about 5 minutes getting briefly acquainted with whomever you’re speaking to, then another 25–40 minutes pitching with or without a deck (I don’t think it matters too much — I’ve heard great pitches both ways). That pitching should be conversational, though note that every investor has a different style. Some will mostly listen, then ask questions at the end. Others will jump in frequently. Don’t take a lack of interruptions as a bad sign, but do make sure to take breathers and allow for long enough pauses that someone can ask question without interrupting you. If you want to an absolute beast, pepper your storytelling with ultra low cognitive load questions for your investors that are either interesting or revealing. I may write more on this later; I trick I learned as a teacher and have coached entrepreneurs through successful Series A and B fundraising processes using it.

One final note on that pitch is that you should save your questions for your investors about them and their firms for the end, and honestly probably only ask them if you felt like the pitch went at least fairly well. If your interaction is 30 minutes or less, I would recommend not asking those questions at all. That time can be better spent creating excitement and answering questions, and if that goes well there will almost certainly be another, longer meeting in which you can get into that.

It is good to vet investors and understand their process, but at the same time it’s usually much more likely that you will accept their money than they will decide to invest in you. On the balance, an initial meeting should focus almost entirely on trying to convince them that they should invest in you. You can always turn down their money, but it can be hard to get another chance to convince them, and impossible to have a second first impression. I know that this runs counter to a lot of advice that people give entrepreneurs, hence why I’m making a particular point of it.

Remember that investors want to invest in you

In pursuit of magic