When it comes to pitching early-stage enterprise startups, technical founders can sometimes neglect the business side of the conversation. To help build your confidence in “talking business,” DTC’s Ryan Wexler covers the fundamentals of what investors want to hear about how you’ll transform your technology into a fundamentally important business at TC Early Stage 2022.
Here are some of Wexler’s key rules for finding and pitching VCs when you’ve spent most of your time focused on technical aspects of the business:
When you’re pitching a company, the very first thing you have to [do] is to essentially pause for a moment to really ensure that you’re actually speaking to the right person. When you’re a technical founder pitching a DevOps product or a data infrastructure product or a cybersecurity product, if you’re speaking to a VC that only invests in consumer or FinTech, or whatever it may be, they’re never going to fully understand your vision or fully respect everything that you’ve been able to build.
It happens a lot, a lot more than you imagined. So the first thing that you really have to ensure is you’re not just reaching out to 10, 15, 20, or 100 different investors, [but that you’re] really focused on speaking to the right people.
The next thing is, during the pitch, people immediately try to jump into [saying] “This is what I’ve done and this is why it’s important to me,” but they never really say why it is important to the broader audience. Why do customers care? And why do you as an investor care?
You really have to understand what your strengths and weaknesses are and give them that one reason to care, whether it’s your personal background, whether it’s that you’ve built a product that’s never been built before, or whether it’s you’re attracting a new market. You really have to give them one or two reasons to care, especially at their earliest stage of company. The one thing that really gets us over the fence to make an investment is to really believe in that founder, that company, that vision. And to do that, you have to craft a story.
If you’ve been building up your career to the point where you want to raise money, and you’ve been working, and you got a PhD in this very special specific field, or you’ve been working in this specific subcategory for a decade plus, you’re going to know your field better than any VC. If you’re speaking to the right VC, they’re going to do the work and they’ll be familiar with the space and they’ll know your competition. But they might not know the specific attributes of every single startup or every single big tech company in your specific space, you have to explain that to them in a way that they’ll understand, without getting too deep into the weeds.
It probably doesn’t matter what programming language you’ve built your dev tool with. But if you do have three to five direct competitors, it wouldn’t be helpful to understand how you’re going to differentiate yourself, what specific things about your product make it different. Remember, you’re going to know more about this field than any VC in the world. Most of the job of the pitch meeting for you as a founder is educating the VC and giving them a reason to care at the end of the day.
Ryan Wexler | Investor — Dell Technologies Capital