VC Pitch 101
Introducing Serena Capital Summer Workshop
It’s a fact that most start-ups need VC money at some point. Even the ones with great business models (no burn, negative WCR, high margins, huge traction) eventually decide to go for it, because of the wild unfair advantage it gets them in terms of competitive edge.
It’s also a fact that it’s rare (I insist, 2014 stats here) to see large Series A/B in France. As a former fundraising advisor, I have seen how hard it is to make it happen. Even for the best teams, luck is always a factor.
There is however a factor that carries way more weight than luck, and it is preparation. To that regard, I hope that the following tips will be helpful.
Part one : getting the meeting
VCs are solicited a lot, but not in a smart way most of the time. You can stand out quite easily if you do it right:
- get a recommendation from someone we know and respect (a business angel, corporate, good fundraising advisor, …). Better yet, make her write an intro email
- if you have to do the cold email, pitch your company right by giving out clearly in the email the stage of your company, what you do, your ambition and your key kpis. More about emails here.
- do not hesitate to be (reasonably) pushy if someone does not answer quickly enough. During fundraising processes, I used to call every VC still in the race every week, just to feel the pulse. Most VCs are swamped by their agendas. No one is proud of it, but you can turn it to an advantage by being proactive to increase your chances.
Part two : the meeting
There are two types of first meeting. You can get to meet with an analyst or with a partner/principal who has the authority to make her own deals.
Meeting with an analyst usually counts as meeting zero. You’ll have to convince once again a principal or a partner to meet you if you want your case to move forward. Therefore, be careful to convey your message simply and efficiently so that the analyst can (1) understand what you do, (2) be inspired by it and (3) carry the message to her team without strong bias. Meeting with an analyst first is helpful if you manage to convince her, because you’ll have an ally for your next meeting.
When you do get the actual first meeting, consider that you have to start from scratch, and pitch as if the person in front of you had not been briefed. Best case scenario, you’ll be told that your interlocutor is already up to speed. If you don’t do this, and the person has misunderstood key elements about your pitch, you’re likely to fail the meeting.
There are many factors that come into play then, and we’ll cover them in a follow up article. However it mainly comes to 3 key effects:
- EMPOWER your audience: help them see they key forces at play in your market, make it easy for them to understand the stakes and your value proposition.
- AMAZE the people in front of you: there should be a point in the presentation when people go “no way!” — because of your traction, technology, trojan horse strategy or secret sauce…
- REASSURE your audience : show KPIs, hard facts, client testimonies, upsell/cohorts charts, … If you have shiny achievements (A Fortune 500 client co-authored a white paper with you, Gartner chose you for their Cool vendor paper, …), don’t forget to talk about it.
Part zero: how can you prepare?
You should really be prepared for the roadshow, because sadly you only get one chance to convince her, and the VC-person won’t see you again before six months, unless there is a substantial change in your business.
- You can watch this TED video
2. You can buy this book to get a sense of how deals are really led to completion, and of the huge chunk of psychology behind it
3. You can read this previous article of mine to get a detailed checklist of the things not to do during the meeting.
4. You can review your pitch with a little help from your business angels, friends and laptop webcam (do this a lot) or get a second opinion from one of the good fundraising advisors. If they want you as a client, it means that you have a strong chance of success.
6. … and you should meet your target VCs a few months before you start the roadshow. Over coffee, in a non-crucial meeting that we’ll help us get to know each other, and get the measure of your progress over time. The best timing for this “extra” meeting is probably 6–12 months before your next roadshow, so that the VC can feel that you’re not too far from her target in terms of size/growth and wont turn you away as “too early”.
To be continued
If you’d like to know more about fundraising and pitching to VCs, I invite you to apply to our Summer Workshop. Four sessions are set up in July (10 companies max. per session), during witch we will discuss the best strategies, tactics and best practices.
See you soon! :)
ps: thanks for sharing the good news (on twitter, or by sending the link to your entrepreneur friends) ❤
About Serena Capital
Leading Venture Capital investor with 250 M€ under management, dedicated to support great innovative startups.
A few words on our philosophy of being a capability-driven investor: https://blog.serenacapital.com/join-the-dark-side-971de57fa73
At Serena Capital, we are early-growth investors, investing in European companies which have proven business models and the capacity to grow quickly and become market leaders.
Our investment range goes from €3 million to €15 million with a focus on a variety of technology sectors including internet and media, big data, software, telecom and mobile, consumer electronics, IT services .
Serena I portfolio companies :
Augure, Aramis Auto, Bonita Soft, Coach Club, Groupe Arlety, La Fourchette (sold to Tripadvisor), Melty, Prestashop, Prixtel, Sequans (NYSE : SQNS), Santé Vet, Selectron, RSI Video Technologies, Worldstores
Serena II portfolio companies :
Work4, FinalCAD, Qualtera, Dataiku, TextMaster, Habiteo, Cheerz, Lengow, Evaneos
Find out more about us at www.serenacapital.com