Every startup founder in this world is possessed with an extra-ordinary passion towards building an idea, zeal to get ahead of the competition or bring something new to the market. All this further push them towards infusing more funds into their startups and thus, the desire to reach and attract VCs.
There are few things you must keep in mind while meeting any VC for the first time and while preparing your seed stage pitch deck. Next View Ventures, keeping this in mind, prepared two sample templates to give a glimpse of how your seed stage pitch should be prepared step by step.
Goals For Your First Meeting
The goals of your first meeting should not be to secure funding but to secure the next meeting so that the process can continue. You want to get an investor excited and intrigued enough to perform some due diligence and convey the excitement to his or her partners.
Many pitches fall flat because they’re not framed as a story. You need to play with both head and the heart – investors make decision with both. All stories can be broken into three parts and your pitch’s story should lead to your product being the logical conclusion.
Mistakes To Avoid
Under or Over-Preparing: These kind of pitches do not don’t convey the basics (What, Why and How), nor do they articulate the problem being solved by the product. On the other hand, some pitches feel stuffed full of too many details, either in a sloppy fashion or in an overly “type A student” fashion.
Claiming this is your last-ever round: This is somewhat common for entrepreneurs to say. But if the business is truly great, you’re better off raising future capital so you can step on the gas. Additionally, taking venture capital implies a founder is trying to maximise growth and returns. Claiming otherwise can hurt your credibility, as it conveys a potential lack of understanding of the fund raise process and expectations.
Sharing your deck in power-point: Nothing is more cringe-inducing than a sloppy looking deck. It’s so easy to avoid too – send PDF’s, not editable files, to maintain design consistency. While this may seem trivial, we see this often enough – and you get so few chances to make a good impression – that it is worth mentioning here.
Things To Remember
Main Goal: When you pitch to an investor, your main goal should be to convey three things:
- It matters: The problem is truly painful and the opportunity is huge.
- We’re the people to do it: your team has the talent and the unfair advantages to win.
- It’s already happening: Early traction hints at much bigger success in future.
Articulate the basics of ‘WHAT’: As with any style pitch deck, you should articulate the basics of WHAT you do up front. Founders fail to convey this often, which derails their pitch immediately. Don’t forget to include this simple yet critical detail early in your own story.
Why you exist?
After conveying the basics of WHAT you do, it’s now time to tell the main story- WHY you exist. All compelling stories, from nursery rhymes to Shakespeare to your pitch, can break down into three parts:
- Status quo: What is the state of things historically or today? For a pitch, the status quo is the observation you’ve made about the market that will inevitably lead to Part 2 of your story.
- Conflict: A problem is encountered by the “hero” of your story. In your case, that’s your customer, NOT your company. The status quo alone isn’t enough. It must lead to a problem. No problem, no product. No product, no company. You want to really hammer home this idea of the problem you solve.
- Resolution: You’ve laid out the status quo of what’s happening, as well as the resulting problem. The resolution to that problem comes next. It should lead neatly into an “oh, by the way” moment. Putting it all together: “We’ve observed X, which creates problem Y. The solution is Z, and oh, by the way, that’s exactly what we’re creating.” Investors want to believe you are the inevitable resolution to this story. Next outline why you’re the best team to provide it.
Why Some Pitches Fail And Others Succeed?
During the seed stage, many pitches exhibit the same issues. They lack in presenting a compelling story. This happens because some pitches are barren: not enough content, not crystal clear on what they do, no overt ask for capital, no slated plan post fundraise and even not clear why their solution is inevitable. All of this only frustrates and confuse investors.
Secondly, some pitches are cluttered: Too much copy, too many details (vs. the KEY details).. These are hard to follow. The story gets lost in all the noise.
Further, it’s also important to focus on the way you deliver the pitch.
Stories target the head and the gut
Investors make decisions using both of these things. The head (Is this a smart business? Can it scale and make money?) and the gut (Am I excited about this? Does this feel huge?). But unless you’re a world-class storyteller that can make plain slides come to life, regular slides won’t cut it.
Stories convey the WHY:
Young startups lack a history of proof but have plenty of purpose. This is the driving factor behind your pitch. If you’re launching to simply make money, most investors won’t actually get excited. Most VCs look for ‘authentic’ founders – people who identify a problem and understand their why, their mission. When things get tough or challenges arise, as they always do, these founders will run through walls to keep building their businesses.
Stories have high impact in little time
Maximize your short pitch meetings. Stories shed light on things where two sides might have in common, like shared purpose or common interests. Seed VCs invest in people much more than they invest in business plans and ideas. By delivering a story one can quickly get others excited about the opportunity. This fits within the constraints of a pitch meeting and allows for important follow-up questions after.
Not only should your story in your pitch present your company as the logical conclusion, it should drive home the “unfair advantage” every investor seeks in entrepreneurs when it comes to actually gaining traction. It’s not just about building something worth using – it’s about growth. for achieving traction and distribution
Maybe you have an exclusive partnership with a big brand. May be your team boasts a truly connected, all-star cast. Whatever the unfair advantage(s) is/are for your company, articulate that loudly and proudly. These are the factors that help investors see you will not only succeed in general but will succeed early and often. Note that this is mainly about distribution.
Remember, you should be prepared to speak more to each point in your pitch. Otherwise, it can feel like a gross oversimplification.