I’ve raised around a billion dollars in funding from venture capitalists and have been an angel investor in dozens of companies, so I’m not surprised when founders ask me for pitching advice. Having been on both sides of the table, I’ve seen what works and what doesn’t many times over.
And what works is pretty simple: Winning pitches paint a grand picture. They unveil a huge need, show a broken problem, and present a great solution. There’s validation from customers right from the get-go, and a real business model that shows how big this company could get if it’s given the opportunity.
But if that’s the main thing, it’s not all there is to it. Here are three quick tips I’ve found to be crucial every single time.
Never Pitch Without Practice
Entrepreneurs can get stuck in the weeds. I’ve seen presenters spend 40 minutes on just one piece of a pitch and never tell the whole story. You can usually avoid pitfalls like this just through practice, but that doesn’t mean rehearsing in your boardroom. You need real-world practice.
When I work with entrepreneurs here in Los Angeles, I tell them to meet with four or five VCs locally. If they knock it out of the park in the first couple of meetings and get the terms they want, then great. But often in those first couple of meetings, they get asked questions they weren’t prepared for—and that’s a good thing.
This way, when they go up to Silicon Valley for those next five to six meetings, they’ll have slides that answer those questions—they’re at the top of their game and will be totally on the ball. Which leads me to my next piece of advice . . .
Make Pitches Five Through 10 The Ones That Really Count
No matter how much rehearsal and prep you do, you’ll never be as good in your first pitch meeting as your fifth. You need the rounds of feedback from high-stakes pitching to get the gaping holes in your story pointed out and to fill them in. With every refinement, you’ll be fixing smaller and smaller problems.
This way, you’ll be sandpapering the small scratches out, and once that’s finished you’re ready for the big show. Remember, you only get one shot.
Put Your Punchline First
Skip the wind-up. There will be situations when you’re out networking and socializing, and you unexpectedly have a chance to give a VC your three-minute pitch. Lots of entrepreneurs will use that time to tell a story but never get to the punchline.
Investors want the punchline upfront and then the story behind it. I typically ask entrepreneurs, “You’re going to have three minutes to pitch someone, so what are the three most compelling points you can share?” And they tend to give me five. So I’ll say, “No, give me three—and you need to be able to do it in 60 seconds or less.” Don’t be afraid to get straight to the point.
Stick To A Formula
As with many things, figuring out your three-points-in-60-seconds formula is the hard part—but do that, and you won’t have to reinvent the wheel each time. Once you’ve nailed down an approach you like, following it should be easy. To help you find the formula that works for you, start by answering these questions as truthfully as you can:
- What’s the big problem I’m solving for?
- What’s my solution, and what makes it special and compelling?
- Do I have customer validation?
- What do I think the unit economics would be?
- How much cash would I need to hit profitability?
- Over the next 12 months with X amount of cash, what are the three things that I could tell the investor at the end of the 12 months that say, “You successfully invested your money”?
If you can’t answer those fundamental questions, then most investors will have a hard time pulling the trigger.
A final note about pitching: You need to make sure you have the right team. In rounds one, two, and three, most investors will tell you that they’re investing in the team. You can have an idea that knocks it out of the park, but if the VCs don’t think that the team can pull it off, they aren’t going to invest. Immense talent, experience, chemistry, and a history of success aren’t bad qualities to look for when you’re building the team that can pull off your vision. After all, that’s what VCs are looking for, too.
John Suh is the CEO of LegalZoom.