Anne Dwane is a co-founder and partner at Village Global, a Venture Capital firm backed by industry-leading entrepreneurs, and an investor herself. In this guide, she shares her wealth of knowledge to help seed founders understand the framework for building a successful fundraising pitch deck. This is an abridged summary from Anne’s session in On Deck Founders.
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There is no strict recipe for fundraising. The beauty of being a founder is that you get to create your pitch deck through the framework that best represents you and your company. This guide will provide you with some of the best ways to go about building that framework — from understanding your audience to common pitching pitfalls to avoid.
Know Your Audience
The rational decision when it comes to investing in a startup is always “no”. It is an incredibly risky venture, and you can’t always build trust with facts alone. To understand your audience, first understand that a yes from an investor has to be, at least in some part, emotional.
For that emotional appeal to exist, it’s worth your time to really research the people you’re going to be talking to. Use their blogs, websites, social media accounts, and websites like Crunchbase to learn more about them.
You’ll quickly learn whether or not the investor is relevant to you and your company, and whether they’ve invested in companies like yours in the past. You can also tailor your pitch to their subject matter expertise. For example, if I’m an investor that has done a lot of investing in the future of work space, you don’t need to spend five minutes explaining the future of work landscape to me. That’s a waste of both of our time. But I don’t do much in quantum computing, so if that’s your unique perspective, I’m very eager to hear about that market.
Most seed investors are investing in people, not just businesses.
By researching in advance, you can also better treat investors like people during your pitch meeting and ask them questions about themselves and their interests. The best way to be interesting to other people is to be interested in them. Studies show that the person who talks most during a meeting thinks the meeting went the best. So turn the questions on your investors and get them talking.
In the first 5 minutes of a pitch meeting, aim to strike up a rapport with an investor as an individual. Most seed investors are investing in people, not just businesses.
Take time to research what your potential investor’s average check size is as well. If they usually write a $1 million dollar check for a $1.5 million round, you can say: “You know what? Just coincidentally, we’re raising $1.5 million and we’re looking for a lead who will write a $1 million check. Isn’t that great?”
Who you’re pitching to matters, and if you’re not adjusting your pitch slightly, then you’re doing something wrong.
If your research leads you to find an investor who you believe would be your perfect fit, reach out online. Social media tools like Twitter can be fantastic to understand your investor’s interests and make a connection. If you have a mutual contact, like the On Deck team, send an email to them that can be easily forwarded. This email should have a clear subject line, a customized and relevant body with a teaser about your company, and an ask for an introduction.
A quick tip: use a tool like DocSend so you can see who has opened your email.
Once you’re in contact, communicate the reasons why you are a great fit and a great investment, and then prove it during your pitch meeting. A basic knowledge of your audience will give you the tools you need to secure that opportunity.
Also read: A Tactical Guide to Seed Fundraising
Strengthen Your Deck
A good pitch deck should be clear, concise, and simple — and it should be intelligible if someone were to read it on its own. I recommend a maximum of 10 slides in which you communicate the 5 things you want people to remember about your company.
Here are other common inclusions in a successful pitch deck:
- Executive Summary. This is either an agenda for the meeting or an overview of your company. On its own, it could lead to a conversation that fills the entire meeting — if this is the case, you have absolutely caught your investor’s attention, and that’s a good thing.
- Vision. Venture investors want to invest in really big things, so they have to believe your venture can be big. Maybe you start small, and you have a wedge that lets you get big — either way, you have to make sure you’re convincing investors of your company’s potential. What problem are you solving?
- Total Available Market (TAM) or Serviceable Addressable Market (SAM). Take a top-down approach by talking about the millions of dollars spent per year in your product’s market. Or, take a bottom-up approach and project the amount you believe that your company could get people to pay for your service or product. Make sure the number is big enough to be attractive. What is the size of the opportunity?
- Team. Emphasize to the investors where the company has come from, the strengths of the people on the founding team, and why you’re the perfect people to lead this venture right now. Demonstrate why, together, you make a great investment.
A pitch doesn’t have to be complicated or profound, it just has to be effective.
For example, the real estate company Opendoor had the insight that sometimes people just want to sell their homes now, versus going through a long process. That’s the insight, it’s simple but also a good investment and a good product.
Ace the Pitch
Let’s jump into the heart of the matter. While the framework you use for your pitch is malleable to suit you and your company, its basic hierarchy should address these key factors: attention, curiosity, clarity, and conviction.
Grab Attention
The goal of your first interaction with any investor is not to get them to invest, it's to get them interested in learning more. It’s important to use the first couple of minutes of your pitch to really grab their attention.
If in the first two minutes of a meeting, you don’t capture my attention or the attention of the partners, it can be downhill from there. First impressions matter.
Here are a few ways to start your pitch in order to achieve that instantaneous interest:
- Start with a human story. What led you to found your company? Whether it be an illness, a life-changing moment, or an adventure, personal stories work.
- Open with an “epiphany”, or a shocking statistic about your industry that may surprise them.
- Pose a problem. Capture an investor’s attention by presenting the enormity of a problem and how your company could solve it.
- Ask a question. This question can be personal or professional, but many investors are doing eight or more hours of Zoom calls a day — you’ve got to wake them up.
Make the start of your pitch like the start of a James Bond movie. James Bond movies don’t start by telling you about the character, they start in the moment.
There are lots of founders at the seed stage who say they never actually ended up using their pitch deck — their initial conversation with the investor took up the entire meeting, and they sent their deck in a follow-up email. This is ideal when it comes to engagement, interest, and emotional connection.
If you’re getting a lot of questions during a meeting, take that as a good sign.
If you’re pitching virtually, you may have to be more conscious about asking questions and interacting with the investors than you would in person. If the meeting feels one sided, check in with your investors and ask them if they have questions, or if the material is resonating with them.
Build Curiosity
Once you have your investor’s attention, you can focus on building curiosity. Most investors are in venture because they love learning, so cater to that curiosity. Don’t focus on selling as much as being compelling — you’re not presenting, you’re sharing, teaching, and discussing.
Early stage investors are not the kind of people who are purely financial investors, they want to be rolling up their sleeves with you. Allow them the opportunity to do that by bringing them into the conversation and building their curiosity.
Provide Clarity
The single best pitch practice I can give you is to record yourself on your phone. Practice, practice, practice, but try not to be too polished. Aim to be relaxed and clear in your delivery so you can focus on listening and trying to pull investors into the conversation.
Instead of trying to tell the investor everything about your business in one go, aim for simplicity in your pitch, tie it up in a bow so you’ve clarified your company’s intent and left the investor wanting to lean in and learn more.
Investors don’t need to know everything up front, they want to see:
- What makes your business interesting?
- How do you, as an entrepreneur, see the opportunity in the world?
- What makes your business a good investment?
- What makes your business unique yet understandable?
Often, after you pitch to an investor, they’re going to turn to their partners or others to do due diligence, and they need to know how to clearly describe your business. Give them the language to do that; your pitch should cover the three to five things they should remember.
Tip: Practice your pitch with a friend who doesn’t know your market. Evaluate if they understood your business the way you wanted them to, and if not, clarify your deck further.
Demonstrate Conviction
Conviction is the reason that an investor should believe that you and your team are capable of achieving your goals. To demonstrate conviction, show an investor your journey. This can be through your customer research and engagement with potential users, or how your business plan has evolved in response to regulatory changes. Make it obvious that you’re a fast learner and can adapt to change.
For example, a lot of investors are curious about whether the pandemic, and potentially the recession, positively or negatively impacted you. Use as many examples as you can to show your adaptability and conviction; tell investors why you matter and why your business can win.
Part of this is openly confronting the risks of your venture. It is a strategic practice to bring up any potential risk factors your business may encounter — it shows foresight and problem solving to have a plan ready to address these hurdles. As you do more pitch meetings, the same questions are likely to reoccur, so don’t be afraid to bring them up yourself and address them in advance.
The best businesses, especially at the seed stage, come from founders who can convince investors that they see how the world could work in a different and better way. These founders are telling a story. What’s the best way to tell your story?
Remember, there is no set structure. You can build conviction through demos, video testimonials, slides, graphics — this is the fun part of being a founder, you get to choose.
After your pitch meeting, don’t forget to send a customized thank you to the investor addressing the topics discussed and attaching your deck for reference.
Four Common Founder Pitch Pitfalls
These mistakes may seem obvious, but I see founders get caught in these common traps all the time. Here are 4 things to avoid when pitching your product to an investor:
- Show up and throw up. If you don’t let your investors get a word in edgewise, they won’t be able to ask any questions, and they may completely miss what your company is trying to do. Investors aren’t just users or customers. They need to understand your company on a deeper level; they need to ask questions.
- Rambling answers. If someone asks you a question, try to answer that question succinctly. If you aren’t certain of your response, then acknowledge the question and say you will come back to it later, and do so only once you’ve had a chance to think of a concise response.
- Being defensive. If you don’t know how to respond to a question, don’t be dismissive. The investors are trying to understand how you deal with uncertainty, and that matters as much as the content of your answers. Instant defensiveness is a big red flag and likely to put an investor off of you as well as your company.
- Forgetting follow-up. This one is here for your own sanity: don’t leave the conversation without understanding what comes next. You can do this by asking key questions like: “We have a number of meetings set for the last week of August. Should we meet again beforehand?” Framing next steps in this way can also create the FOMO that investors need to push them to move faster than potential competitors.
Make the Pitch Your Own
The secret to building the perfect pitch is that there isn’t one.
Every founder is different and every company’s pitch will be customized and best suited to their business plan. However, there is an intelligent and effective way to approach your pitch process for optimal results.
Know your audience, strengthen your deck, and make sure to grab investor attention, build curiosity, provide clarity, and demonstrate conviction during your pitch. Most of all, focus on forming relationships. Ask the right questions to secure an investor’s attention and engage their emotions.
Use the guide above to your advantage as you put together a framework that works for your venture, and that will win you the fundraising your company deserves.
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