How to Improve Your Venture Capital Pitch in 5 Waysby Brady Bohrmann, Partner at Avalon Ventures

About Brady Bohrmann

Brady has over 20 years of experience as a venture capitalist and operating executive in both information technology and biotech. His focus is on early-stage investments and backing talented entrepreneurs.

Throughout his venture capital career, he has worked with over 75 companies. He currently is a director or observer of many Avalon portfolio companies, including Backupify, Chart.io, Cloudant, Inc., Conjur, Indix, Juliet Marine Systems, Kaltura, Kinvey, Memrise, Nanigans, Pingup, Redbooth, Selectable Media, Simulmedia, The Happy Cloud, Twinstrata and Vook.

If you are the founder of a tech startup, it’s likely that at some point you will need to pitch a venture capital firm to raise money.

I’ve seen a wide array of pitches over the years, ranging from the downright bad to outstandingly good

Here are a few simple tips to help you prepare for and improve your pitch to venture capitalists:

1. Do Your Homework

Learn as much as possible about a VC before you pitch to them.

Do Your HomeworkWhen done right, you will have:

• Secured a warm introduction

• Evaluated their portfolio for stage and fit

• Loosely determined whether your startup is the right match for the firm.

That is to say, don’t waste time qualifying the firm during your meeting -- do that all ahead of time and use the meeting to tell your story.

2. Don’t Confuse Courtesy With True Interest

Many VCs will take meetings with founders solely as a courtesy to a colleague or to learn more about a particular market.

Don’t Confuse Courtesy With True Interest

VCs are experts at saying a soft “no”, so your responsibility is to carefully read between the lines.

Don’t Confuse Courtesy With True Interest

Often I speak with entrepreneurs who thought they hit their pitch out of the park, only to learn that the fund had no real intention of investing.

Approach your first meeting as an opportunity to educate and excite the partner, and to secure a time for follow-up.

3. Don’t Ask for Advice on Strategy

Never ask (or expect) a VC to advise you on strategy or help to flesh out your business plan during your pitch. A pitch meeting is never the right time or place for that.

Don’t Ask for Advice on StrategyThe sole purpose of this meeting is for the VC to evaluate you and determine whether you have a strong business strategy and the ability to execute on it.

an example:I recommend avoiding open-ended questions such as, “Do you agree with our approach” or, “What would you suggest we do?”

Instead, speak confidently and demonstrate your intelligent perspective on the company and market.

This is certainly not the time to be wishy-washy.

4. Don’t Use Buzzwords

Entrepreneurs feel compelled to use industry terms in their presentations.

an example:I’ve seen many presentations become completely incomprehensible because they were loaded with buzzwords, such as, “Our (insert product/service) is highly disruptive and represents out-of-the-box thinking and a paradigm shift in the massively growing (insert sector) marketplace.”

That’s a lot of big words that essentially mean nothing.

Don’t Use Buzzwords

Cut out the jargon and instead explain what you do like you would to a friend who wasn’t in the industry.

an example:

One of my biggest annoyances is the standard presentation format, which most accelerators use on demo day. Because they all look the same, they lose their edge and uniqueness that drives life into a story.

Don’t Use BuzzwordsWhen crafting your pitch, tell your story in a way that is:

• Simple

• Direct

• With as little slides as possible

• Make it personal

Successful entrepreneurs are great storytellers. You too have a story, so tell it.

4. Don’t Expect an Immediate Answer

A common mistake entrepreneurs make is to try to close too fast.

Don’t Expect an Immediate Answer

If the answer is no, the VC has already determined that in the first few critical minutes of the meeting. If that is the case, you can expect (and deserve) a quick answer.

Don’t Expect an Immediate AnswerIt is important to keep in mind that VCs say “no” to 95% or more of the deals they see, and do so for a variety of reasons -- related and unrelated to your company.

In most cases, getting to the “yes” is much more complicated.

Don’t Expect an Immediate AnswerGetting a “yes” requires:

• Checking for conflicts in investments

• Gaining partner support

• Defining the terms of the investment

• Consulting with trusted advisors

• Completing due diligence on you, the company, and the market

• And many other steps

Don’t Expect an Immediate Answer

Similar to a job offer, if you have other options on the table, it’s recommended to be upfront about it, but also careful not to overplay your hand.

Don’t Expect an Immediate Answer• A quick “no” is a good thing. It allows you to move

onto the next opportunity quickly.

• Don’t be discouraged if it takes five, 10, or 25 meetings before you get a “yes”. This is very normal. You may only need one “yes”.

• If you truly believe in your idea, don’t be discouraged when you get a “no”.

• Keep at it!

Final Pieces of Advice• Most big ideas are not obvious from the start and don’t fit into

an elevator pitch or episode of Shark Tank.

• It takes time to develop your vision and convince a VC that you and your team are well positioned to execute.

• Great companies often look like bad ideas at the beginning and many “hot” investments that VCs compete for a piece of don’t even end up working out.

• Just because VCs aren’t lined up outside your door now doesn’t mean your idea isn't good.

The Takeaway• Have passion for your idea

• It’s worth talking to as many VCs as you need to before someone “gets it.”

• If you use these meetings wisely and persevere even when you get a few “no’s”, you will be well on your way to success.

Learn more!Visit http://avalon-ventures.com/blog for more actionable advice on early stage startups, VC funding and other entrepreneurial tips.