HOW TO PITCH TO VCs
Start with Why
Venture Capital is not the best option for every company. Venture Capital investment comes with significant growth expectations. In Venture Capital, the distribution law does not apply. The Power law does. Do you need it? To go where? Equity investment comes with dilution. While it’s best to own 20% of a 100M company vs 100% of a 1M one, it’s not true if you own 20% of a 3M one. Other types of financing may be a better fit. From Business Angels cheques to traditional bank loans or even the trendy Revenue based financing especially if you’re an ecommerce company.
2
When
Idea
Pre-Seed
Seed
Series A
Series B
Series C+
IPO
Friends & Family Business Angels Venture Capital Private Equity Retail
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Who
o Know your Venture Fund! While all funds are under the same Venture Capital umbrella there are many differences: - Stage focus - Industry focus - Specific expertise - Fund life stage - Geographical coverage - Close competitor in portfolio already - Follow / lead role A VC fund says no >99% of time. Which means as a founder, you’ll have to pitch your project 100 times to get 1 yes. Don’t waist your time pitching the wrong investors. o It’s ok to talk to associates, that’s how VC funds are structured.
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And finally How
o A pitch deck is like your resume. It’ll get you to first call
Get an intro
o
Have pitch deck ready
Have a financial plan ready (Excel!)
Do: Tell a story – logical flow Clear and clean Highlight the opportunity and how big it can be – Market sizing Team What you’ve achieved so far - Exécution skills Traction Unit economics Go to market! ITERATE!
o X X X X
Don’t: A pitch deck that is > 20slides Suggest a valuation Have an exit slide Forget to mention competition or say you don’t have any X Undefined acronyms! X Ask to sign an NDA
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THANK YOU!