Having coached and worked with countless startups and teams, I recognize there are elements of serendipity involved when it comes to connecting with a VC who becomes your champion. Still, cofounders can ensure they make a great first impression. VCs tend to look for particular things, so knowing what those are puts you and your company in the best possible position to knock their socks off and get funded.
Here are four things VCs look for in a startup business presentation:
1. A Compelling Pitch
Crafting a great pitch is fundamental for any startup or fledgling business. Spend the time to make yours outstanding.
Focus on the flow of your story. Identify a clear problem in the world today, and talk about other people's opinions of the problem. Are people aware the problem exists? Are there other solutions out there?
Then walk through how your company is solving this problem and how your company's solution is different from any of the other existing solutions – either in the marketplace already or in development.
Don't underestimate the value of a good story. Beyond the numbers and market forecast, a compelling, well-articulated story that taps into emotion and urgency will resonate with VCs.
For additional pointers on crafting a stellar one-minute pitch, read our post, "How To Win a Pitch Competition."
2. A Tech Strategy
Technology is an integral part of today's businesses, whether you're launching a tech-based startup or employing automation in your line of super-spicy salsas. Simply noting your company's use of machine learning or AI won't stand out the way it did a decade ago, since everyone's using those technologies now.
Highlight your tech strategy beyond the buzzwords. If you're harnessing AI or data analytics, describe how the technology fits within your overall growth strategy. How is your company using technology in effective and efficient ways?
Other businesses will likely have access to the same tools you do. What's unique to you is how you're using them, so focus on how method is different from your competitors.
3. An Actionable Agenda
Pitches are a balance of passion and pragmatic reasoning. Alongside showcasing your enthusiasm and drive, you'll need to outline your game plan. Show the VCs there's a concrete plan behind the lofty ambitions.
Include ROI and projected growth, of course, but focus on the next milestone. What is needed to achieve it? What does achieving that milestone look like? How will it benefit your customers and your company’s value?
The path to that next milestone should be paved with actionable goals like adding new features, growing the sales team, or updating the product's software. Identify what you can do now to further your goals, and explicitly state what you will need from others (such as funding or resources). Make it as easy as possible for audiences to help.
4. A Real Commitment
Last but certainly not least is the "why" behind what you do. Your "why" matters a great deal, so give it serious thought.
When you're talking to VCs, share WHY your startup team is willing to put so much at risk, WHY you're willing to work so hard for so little initial payoff in the beginning, and WHY you're willing to invest your own money into the business.
VCs want to know what motivates leadership to show up to work every day and how they're bringing that heart and passion to the rest of the company.
Additional things to note: The impactful things you're doing outside of the company. If your business donates time, money, or other resources to important causes, share that. For example, if your company is a Pledge 1% business, pledging 1% of your profits, equity, time and/or product to charity, that's worth mentioning. Compassion and commitment are very persuading qualities.
Funding may not be a guarantee of future success, but it is a massive endorsement. When someone chooses to fund your company, it's because they believe in your vision and your team's ability. Create a compelling pitch, tech strategy, actionable plan, and place your enthusiasm front and center to showcase you have what it takes
And don’t hesitate to reach out to us. We’re always happy to help founders succeed and have crafted many investor presentations.