It almost goes without saying, if you are a would-be startup, a successful pitch to a venture capital firm requires a well-planned, compelling pitch deck. However, in order to secure investment and successfully get your enterprise off the ground, you’re going to need more than just the initial pitch deck, however impressive it may be.
For your potential venture capital investors, however, focusing all of your attention on creating a superlative pitch deck without having much to back it up can be both frustrating and off-putting. As I often think to myself when I’m going into one of these presentations, “Do you have a pitch, or do you have a plan?” While a good pitch deck will answer the question “why”, more often than you would think, little attention has been paid to the “how” of realizing the business idea.
Following a successful initial pitch, I want to hear specific information delivered with confidence. After all, the devil is in the details! So, now you may be wondering how you demonstrate the aforementioned “how”, and show your potential investors that you have more than just a flashy presentation.
Ultimately, a successful business is one that is earning revenue and growing, so I want to know that you, the entrepreneur, has a firm grasp of key metrics. It’s your job to educate me and other venture capitalists on such crucial facts such as what drives your revenue growth.
Just as importantly, we want to know who your customer personas are, how you intend to reach them, how many customers you require to grow, and to understand reasonable pricing and on-boarding expectations for the customer. Moreover, you need to have a timeline showing roughly how long it will take for you to amass the necessary customer base to succeed. You need to be well-prepared to provide confident, educated answers to these questions, and showing marketing comparables is also extremely beneficial in terms of demonstrating the work you’ve put in prior to the pitch.
After the initial pitch, I want to hear specificity delivered with confidence. I want to know what your driver of revenue is, and what the cost of growth is projected to be. I definitely want to know what costs you anticipate incurring in order to realize their idea.
Without tangible facts, figures, and milestones, it’s difficult to believe that a startup can achieve its goal, and, worse yet, the goal itself may not be properly defined. If you appear hesitant or confused during your post-pitch deck presentation, it’s a fair bet that the venture capitalists you’re directing your pitch to are going to lose confidence in your ability to see your vision through.
While this may sound rather daunting, it is ultimately in everyone’s best interest that a sound foundation of knowledge and strategy undergird any startup idea. Before you get intimidated or worry that the obstacles are too great to get your startup off the ground, remember you don’t need a perfect pitch and business plan before reaching out to a venture capital firm; many venture capitalists are happy to mentor aspiring entrepreneurs with promising ideas, and approaching them as you are developing your concept is a great way to develop a relationship even before you’re ready to pitch.
Another extremely valuable potential relationship that you can build as you get ready to pitch is with an experienced entrepreneur who has recently exited the market that you are looking to enter.
At the end of the day, if you can’t come up with the necessary hard data to demonstrate the efficacy of your plan, you are unlikely to convince venture capitalists and other investors to fund your enterprise and add you as a portfolio company. Be sure to tap into every available resource when you are laying the groundwork for your pitch, including venture capital firms themselves and other entrepreneurs. While we value creativity and innovation, there is no need to re-invent the wheel when you have access to both data and mentors. All we ask is that when you come in to pitch, you’re ready to discuss what’s beyond the pitch.