If you read about the current fundraising environment in the press, it might seem like capital is widely available. However, this tends to be the case for a select few of the “hottest” startups. For most startups, raising funds is challenging, yet imperatative to survival, scale and innovation.
If you are fortunate enough to get time with a VC, be sure to take full advantage of her time. Here are three tips to make your presentation memorable:
Have courage of conviction. There is risk with any type of venture investment, especially one at a very early stage. For an investor to back a startup's idea, she must see breakout potential, or the ability to scale, along with the high potential for reward to justify the risk that comes with ponying up large sums of cash.
The best way to demonstrate this when meeting investors is through your courage of conviction. They want to see your belief, often what you have invested to date, an informed point of view and passion. And investors aren't only focused on the now but also the future. Be ready to explain why what you are building will be important and valued. Throughout your pitch you should exhibit product clarity, know the size and potential of the industry and understand the competition.
While it is great to rattle off how amazing your company is and how it will be the next game-changer, it’s also important to be willing to listen, exchange ideas, engage and ask questions. You may hear contrarian views, but don't lose your nerve or buckle to another’s point of view. As the former CEO of Intel and Silicon Valley great Andy Grove once said: “Fight like you’re right. Listen like you’re wrong.”
Tell your story. What often differentiates one company from another is passion.
But you can't get away with just dropping phrases like, "I’m passionate about” or “we’re obsessed by…” You need to weave in your story.
First answer why you are there pitching your idea. Address and identify your appetite for risk and why you will eat, drink and breathe your product or idea. Make sure you mention past events, including challenge you’ve overcome and what events in your life have formed who you are.
When telling your story, don't just include the product and your vision, but also discuss your team and yourself. This will help persuade an investor that you aren't going to abandon ship when the going gets tough.
Here are a few questions your story should answer: Have you or someone you’re close to experienced the problem you are trying to solve? Why is the product or service you’re passionate about the right solution to the problem? What challenges have you experienced and how did you overcome them?
Focus on leadership and team building. A big part of any interactions with a VC is letting them get to know you as a leader of a vision and a team.
VCs will look for clues to evaluate your leadership skills and your ability to effectively recruit top talent, especially at the early stages of company building. They'll want to know what you look for when hiring, like culture fit, values and skills. Also, how good are you at inspiring, convincing and learning from others.
By being able to identify your value system and mission, this will help an investor determine if they should partner with you.