It’s the end of week 4 here at Founder Labs, and the pressure is on. In just 3 days, we will have our final presentations, so all of the Founder Labs teams are working fast and furious to build out our demos and hone our pitches. On Wednesday, we will present our ideas and learnings in front of a room packed with over 60+ mentors, entrepreneurs and a panel of investors.
This final push is very focused on our pitch (presentation + demo). Though I spent some time in management consulting where I made decks and presentations for a living, I’ve come to appreciate that the entrepreneur-VC pitch is a very different animal. We’ve had the unique opportunity to practice our pitch each week in front of notable VCs (e.g., Fred Wilson, Jim Robinson, Ann Miura Ko, Theresa Gouw Ranzetta and many, many more…) and through this process my understanding of what VCs look for has evolved. I’d like to share 6 lessons I’ve learned about building a compelling pitch for VCs, many of which were not initially intuitive to me.
Lesson #1: Use pictures, not words
This will be counterintuitive for former bankers and consultants, but VCs expect you to tell a story with pictures and speak to ideas, they don’t like a lot of text on a slide.
Here’s an example of a typical consulting slide: http://bit.ly/iJ47r4 (BAD)
Here’s an example of a VC-worthy slide: http://bit.ly/iHcrle (GOOD)
Obviously I’m making a broad generalization here, and the image I’ve labeled as ‘good’ would need to be weaved into part of a cohesive story, etc. The point I’m trying to make is that your pitch shouldn’t feel like a book report, it should be exciting and visual. You don’t need to write your points out in bullet or table form on a page, you should be able to speak to your key points without prompts.
Lesson #2: Explain why you and/or your team has unique market or customer insights.
Ann Miura Ko from Floodgate explained this in the context of her decision to invest in ModCloth. The week she met the founders of ModCloth, a number of companies came in pitching similar fashion start-up ideas. However, these other teams weren’t able to convince her that they had any advantage in understanding the fashion market or the fashion customer. When she asked these companies what fashion magazines they read, they weren’t able to convince her they knew what they were talking about. She contrasted this with the Susan Koger from ModCloth. Susan came in and made it clear she had been vintage shopping since she was 13, and that she clearly understood the community of vintage buyers and their needs. Figure out for your idea what your personal competitive market/customer insight advantage is — and find a way to explain this in your introduction. (Don’t force this, be authentic. VCs see hundreds of pitches a day and will sniff you out if you’re faking it. If you don’t have a unique competitive market/customer insight advantage, you may want to start recruiting teammates who do.)
Lesson #3: Be a ‘thunder lizard’.
This is another piece of advice from Ann Miura Ko. VCs want to invest in billion dollar ideas, not million dollar ideas. So make sure you can explain why your target market and your ambitions are big.
Lesson #4: Team dynamic matters.
If multiple people present, make sure that your hand-offs are smooth and that you have talked with your team beforehand and can answer tough questions (e.g., how equity will be split, who is the CEO). In one of our mentoring sessions, Jim Robinson from RRE actually tested us on this. He wanted to see how we had worked through potentially contentious issues — so he asked us who came up with the idea for our company name, and then later on explained that he primarily asked to observe how we would answer.
Lesson #5: Be energetic.
You need to convey passion. Seems obvious, and I don’t doubt everyone goes into a pitch trying to be passionate, but sometimes things don’t go over quite how you plan. Try videotaping yourself doing your pitch and watch the playback, it really helps! I didn’t realize how much I clasped my hands, or nodded my head in agreement to questions until I saw it on replay.
Lesson #6: Brevity is appreciated.
Be brief. If you can’t sell someone on your idea quickly, you’re doomed. Here’s a 9 point structure for pitch decks from Shaherose Charania (our fearless leader, Founder and CEO of Founder Labs and Women 2.0). I’ve found it really helpful, so I thought I would share her wisdom with you as well:
Sonia Sahney is a former engineer and a semi-professional shopper (10,000 hours+). This combination has fueled her passion for the intersection of digital and retail. Sonia is currently a co-founder of Smarketplaces. She graduated magna cum laude with a mechanical engineering degree from the University of Michigan and has a MBA from Harvard. Follow her on twitter @ssahney. For Smarketplaces launch information go towww.smarketplaces.com, and to learn more about the Smarketplaces team go to www.smarketplaces.tumblr.com.