A venture capital (VC) fund listens about 1,000 pitches a year or more, of which only 5 on average end up in investment. The pitch is the most important tool for a startup to become known, thus prepare intensely and leave nothing to chance. Follow our recommendations according to the different types of pitch.
Description: Short and persuasive communication that is used to generate interest in your startup.
Average duration: 30 seconds — 1 minute.
Objective: For the investor to get to know you, start building a relationship and get a follow-up session.
Communication: You should be able to explain your idea concisely at this time.
Key points to explain: Team, solution and competitive advantage.
Approach: Get a subsequent meeting. Don’t ask for money.
Key action: Give and ask for a business card. Send a thank you note and request a formal meeting.
Recommendation: Have it ready even if you are not actively raising capital.
Attributes: Charisma and leadership.
Investor Demo Day
Description: Presentation at a generic investor event.
Average duration: 2–5 minutes.
Objective: Arouse interest so that investors look for you.
Communication: Story-telling is the key. Tell a story around your company and team.
Key points to explain: Team, source of the problem, solution, market appeal, practical use case, relevant metric, and amount of capital to raise.
Focus: Generate emotions and make your opportunity memorable for investors to seek you out.
Key action: Include contact details in the presentation.
Recommendation: Focus on the competitive advantage and scarce resources that the company owns.
Attributes: Energetic and motivational.
Description: Call with investors to present the investment opportunity.
Average duration: 15–30 minutes.
Objective: Begin to create a relationship with the investor and generate interest to deepen subsequent conversations.
Communication: Direct and adjusted to the investment thesis of the venture capital fund (VC).
Key points to explain: Business model, strategy, traction and use of proceeds.
Approach: Understand the investment thesis of the venture capital (CV) fund, as well as the personality and motivations of the investor.
Key action: Focus on getting a face-to-face meeting and submit the investor presentation as a follow-up to the call.
Recommendation: Give a short introduction about yourself and ask the other party to introduce himself; then adjust your pitch according to what the investor tells you.
Attributes: Receptiveness and adaptation of the conversation.
Face to face meeting
Description: Face-to-face meeting with the investor.
Average duration: 30 minutes to 1 hour or more.
Objective: Build trust with the investor and demonstrate passion for the project.
Communication: Relaxed and open dialogue.
Key points to explain: Team, motivations, vision and business strategy.
Approach: Establish a personal relationship, establish a long-term dialogue and determine if there is compatibility between the teams.
Key action: Establish a positive first impression.
Recommendation: Know the culture of the venture capital fund (VC) and make sure the investor get to know the culture of your team.
Attributes: Professionalism, maturity and respect.
Management presentation with investors
Description: Formal presentation of the startup to the different members of the venture capital fund (VC).
Average duration: 1 hour or more.
Objective: Introduce your key team members to the investor and explain the details of the business model, strategy and operations.
Communication: Elaborate on facts, technicalities and capabilities.
Key points to explain: Operations, technology, finance, legal and tax.
Focus: Show that you have a deep understanding of the business, mission and vision.
Key action: Get to know the members of the venture capital fund (VC) and vice versa.
Recommendation: Share your data room before having the meeting, be prepared to answer any questions related to the business.
Attributes: Information domain.
- Your communication must be simple and clear. Avoid the use of technicalities.
- Know your audience and try to personalize the message.
- Inform and leave material for further analysis.
- Process what the counterpart tries to communicate to you (verbal, non-verbal and written communication) and adjust the communication of your message.
- Prepare, record yourself and improve. Even the best artist in the world prepares before going on stage.
- For further detail on how to build an investor deck, please read this article: https://bit.ly/2BtK1XU
- Be proactive and follow up on the relationship.
In summary, don’t underestimate the relevance of the pitch, get ready, practice and improve. Remember that it is your cover letter. Michel Dell would say: “Ideas are commodities, execution of them is not”.
Hector Shibata. Director of Investments & Portfolio at ACV a global Corporate Venture Capital (CVC) fund and Adjunct Professor for Entrepreneurial Finance.
Gonzalo Soriano. Investment analyst at ACV.
ACV is an international Corporate Venture Capital (CVC) fund investing globally in Startups & VC funds.
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