Venture capitalists get flooded with startup pitches, which can make it difficult for founders, especially those building in crowded categories, to stand out. While every investor is looking for something different, there are ways founders can improve their chances of getting noticed.
Speaking at last weeks’ Disrupt 2022 conference, investors Annie Case, a partner at Kleiner Perkins; Sheel Mohnot, co-founder of Better Tomorrow Ventures; and Jomayra Herrera, partner at Reach Capital, said that the founders who manage to capture their attention are the ones who come to the pitch process prepared.
Of course, this could mean a lot of things. Case said that it’s incredibly helpful when founders help investors prepare for their pitch meeting. When founders send over information before the pitch, or offer a preview of the deck, she can to go beyond surface-level questions right away, which leaves more time for in-depth questions, she said. That allows her to walk away from the meeting with more information, which could help a founder get a check down the line.
If you’re starting a company, and there are three or four other companies that people would look at, I expect you to know intimate details about them. Sheel Mohnot, co-founder, Better Tomorrow Ventures
For Herrera, just sending over a partial or basic pitch deck, or a demo, if relevant, can be wildly helpful.
“I generally recommend having almost like a teaser version of the deck with enough data and information to give us a sense of where you are in terms of the journey of your company,” Herrera said. “Just enough information so that we come prepared to the meeting.”
The three investors agreed that founders should come to the pitch meeting ready to answer questions about the team, progress and TAM. Mohnot said it’s a red flag when companies don’t seem to have thought through these potential questions, especially when it comes to competition.
“If you’re starting a company, and there are three or four other companies that people would look at [in the space], I expect you to know intimate details about those companies,” Mohnot said.
“We do. So odds are we’ve met with those other teams and understand at least a little bit about what they’re doing and what the roadmaps look like. If you haven’t done that homework, that always comes off as not great.”
He added that founders really stand out when they not only have a good answer about their competition but can also speak to synergies that their company may have with startups already in an investor’s portfolio and why it’s a smart play for a VC to back both.
The investors noted that founders should be able to show their knowledge of the sector and market they are building in. While Herrera and Mohnot said they aren’t looking for founders to necessarily be experts in the field — as that is their value-add as sector-specific investors — entrepreneurs should show enough to make it clear why they are the right founder for the job.
They should also have conviction and confidence in their company and what they are building. Founders being wishy-washy when asked a basic business question doesn’t sit well with Herrera. “It just shows a lack of critical thinking, and also a lack of, I don’t want to say it, integrity,” Herrera said. “In the pitch, if you’re kind of hand-wavy, I imagine in board meetings, you’ll probably be hand-wavy, and when you’re talking with your own employees, you’ll probably be hand-wavy. So for me, it’s a yellow or red flag.”
The investors also said founders should be prepared to ask them questions during the pitch process. Case said she finds it odd when she asks a founder if they have any questions and they don’t. It can show that a founder isn’t super interested in the firm they are asking to enter into a multiyear relationship with, or that they are looking to raise money from anyone who will supply it.
The investors pointed out that it is most important that entrepreneurs should show why they are the best person to build their particular startup. That doesn’t mean a founder should become a straight salesperson, but make a compelling case that their company will win the category regardless of competition and back it up.
Case added that founders should be able to clearly explain why they are interested in the problem they are trying to solve to begin with and why they are willing to spend the necessary time to fix it. “For seed investments in particular, but [this is] just as true at Series A, it’s ‘Why are you doing this?’” Case said. “Why have you chosen to spend the next 10-plus years of your life working on this problem specifically? What is your learned or unique insight on the space that you’re tackling?”