Founders! The road to Seed Stage investment doesn’t have to be complicated. After many years of being on the other side of the table, I’ve created a complete guide of tips to help founders begin their journey on the right foot.
To begin, let’s dive into the all-important pitch.
Make a quick impact 💨
Your pitch deck is the first junction to securing seed-stage investment, so you have to ensure that it makes you stand out, not be tossed out, from the pile of startups in front of investors. Remember, investors have a short attention span, and making a quick impact is key.
To start laying the groundwork, your deck should contain these main elements: company purpose/vision, problem, solution, market size and why now, competition, product, business model, team and financials.
Your pitch is not just the 3, 5 or 10-minute presentation that you’ve tirelessly worked hours on, tweaking the deck, adjusting the fonts, changing the script, and practicing over and over for the big demo day. It’s also how you present yourself and your company to investors in a more informal setting, telling them what you’re passionate about and why you’re the right team for the job.
Not only are you trying to make a strong first impression, you have to do so in a limited time, which means compiling all the most promising aspects about yourself and the company, without losing sincerity. Think of it like speed dating, if you’re hyperbolic, the people opposite will see right through you. You need to find the balance between showcasing yourself and being genuine.
Sounds difficult? It’s surprisingly not. Start by honing in on these specific areas:
Your vision is the backbone of your company. It’s what keeps you up at night, conveys your purpose, and gets your team rallied around a common goal. Your vision should include how you want your product/service to evolve, the features and hires that will get you to that point, and the markets or verticals you want to branch out into.
During early-stage investment rounds, investors want to know that your idea has legs not just now, but in the future. Where will you be in 5 to 10 years? What are you doing that will disrupt your industry for good? There are so many copy-paste startups out there, your vision has to be what separates you from the crowd and reassures investors that you’re here to stay.
How are you creating an impact? How are you making people’s lives easier? Saving time and money? Connecting people? Your vision doesn’t have to solve the biggest issues facing society but it should explain how you’re making a difference in your niche in a really powerful way.
If your vision is the backbone, your goals are the good posture that supports your vision. Clear goals should explain how you’re going to use investor funds across incremental timeframes, and how you’re going to get from point A to B. These goals are what hold you accountable to your vision and to the image of the company that you’ve sold to investors.
Ideally, you should have goals listed for the next 6 months, as well as goals for the next five years (although these can be slightly less fleshed out).
Your market is the potential people you´ll be serving. Without a clear market, no investor will move forward with your startup. Remember to explain why now is the right time to attack the market and explain these factors
Detail the size of your market, whether you’re creating or targeting specific segments, and how the needs of those groups may change in the future. Also add how you’re going to grow beyond those markets in terms of geography, user persona, and upselling. Remember that if you’re targeting venture capitalists, you’ll need a large market to see the economic returns that VCs lean toward (we’re talking billions of people, not millions).
Competitive Moat 🏰
Your competitive moats are the tools and strategies you have in place to defend against competitors in your market. How will you stay ahead of the curve? How are you offering value beyond what’s already available? How can you maintain that value? Your competitive moat can change as you scale, but you need to communicate to investors from day one what the basis for it is, and how you’ll continue developing it. For example, you may offer lower prices than other players, but how can you keep those prices as tech and team expenses go up?
In rare cases, investors may accept the theory around your startup, but they really want hard proof and signs of product-market fit. They want to know how many active users you have, retention rates, churn, pilot programs, earned revenue, and any metrics that demonstrate traction. That said, investors don’t want vanity metrics that don’t mean anything in terms of real growth.
Projections can be worthwhile but for early-stage investors, they don’t mean a whole lot. Investors don’t want you to tell them where you’ll be in X years, they want you to show them how you’re already on your way to that point. Ultimately, you should be saying “the need for this startup exists and I can prove that we’re a good solution.”
Your team is your company’s DNA – they’re the people who make your vision and goals happen and they matter to investors. Provide a short but relevant snapshot of your team in your pitch, explaining why they are the experts, what their backgrounds are, and why they’re committed to the startup.
Don’t be afraid to bring your personal story as the founder in either. Degrees are great but if you can add an anecdote about how you relate the purpose of your company or how you have felt the pain point first hand, investors’ eyes will light up.
General Pitch Deck Housekeeping 🧹
Don’t overlook the design of your deck. The presentation should be digestible, professional, and appropriately branded, but it also should match the vertical you operate in. For instance, if you’re in the tech space, you could incorporate a product demo or dashboard overview.
Avoid buzzwords that investors will be bored by or may not be familiar with. Your language should be concise and understood by all types of investors, including those who don’t heil from your industry.
Edit your deck according to the medium. If you’re sharing your deck via email and presenting it in person, you absolutely have to tailor it accordingly. Think about how much text is necessary per slide if you’re talking through it at the same time, consider what you can and can’t relay with body language, and pinpoint where you need more context without an audial walkthrough.
Practice, and practice again. Test your pitch and deck with your friends, family, other founders, and any stranger who will listen to you. Fresh ears will help you understand how clear and intriguing the pitch is – and the less they know about your startup, the better the test audience.
Don’t expect investors to sign NDAs to view your deck. It’s easy to get hung up on the idea that someone could steal your idea but no investor will sign something before they’ve committed to it. At the end of the day, your pitch is only the idea, and requires the right execution and drive to make happen.
Keep your online presence updated, meaning your website, LinkedIn profile, and any social media. Investors will do their due diligence around you, and if there are any gaps or discrepancies, it’s an automatic turn-off. They want to know that you’re fully dedicated to your startup, constantly spreading the word and not working part-time for a cause that needs full-time involvement.
Happy pitching! And always remember that the most important element to successful pitching is the passion and belief you have in your product and team! 🚀
To avoid some of the most common pitfalls in pitch creation, check out this article from seasoned VC, Yannick Oswald.