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Saturday, May 21, 2022

Crafting a Successful VC Pitch

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Venture capital has long been a sought-out avenue of entrepreneurs to take their businesses to the next level- you have an idea, you’ve gotten it to work at some level, but you don’t yet have the financial means to get to that next stage of development. 

The good news is there’s an entire industry of investors and visionaries looking for the next big thing to be a part of- “unicorns,” as they are often referred to. The bad news: everyone, including you, wants their attention. How do you stand out?

Often, those seeking capital may only have a single opportunity to present their offering to a given investor, so you need a compelling pitch- something more memorable than just facts and numbers, a story that captures who your company is and where it’s going.

Here are 5 ways to make your pitch worthy of a deal:

  1. Make it clear what your company is aiming to be. You’re asking people with no relation to you to take a chance- not on what it currently is, but what you hope it will become. What’s that image in the future look like? How will their support help bring your vision for this venture to life? 
  1. There’s a real problem you’re trying to solve. Any company can have a good culture and treat their employees with nice perks, but why is it there to begin with? What challenge is it attempting to overcome? People appreciate a real struggle that has to be dealt with, whether it’s an annoying inconvenience or a bottleneck holding them back from greater potential, and they’ll be even happier to know that you can do something about it.
  1. Your big problem has an even bigger solution. At this point, you’ve established the challenge, now “wow” them with how you make it better. Be specific. What’s your offering, who is it for, and can you put it in a simple sentence or two that gets right to the point? Whatever product or service is being offered should directly and obviously make a difference to a target market who could benefit from it.
  1. Tie your vision together with investors’ involvement. This is where everything should line up: you have a problem, a way to do something about it, and a business who knows what it wants to become- how exactly do investors help make it a reality? This is also where specifics come in: business models, forecasts, industry trends, a quantitative sense that your idea works in the real world, and actually has the potential to continue evolving with their support.
  1. Make your “ask” and show them the happily-ever-after. Now that you’ve convinced your audience you have something real, what do you need from them to make it happen? Don’t just tell them a number, make sure they also know what to expect in return, and what milestones to expect in between. Investors should be clear on: 
    1. How much you’re asking for
    2. How those funds will progress your company further
    3. When and how much they can expect to make with respect to investment returns
    4. Lastly, what the company should look like down the road because of their involvement

Navigating venture capital is always a challenge, but telling the right story about your business can tremendously improve your fundraising prospects, and help bring its potential to life.

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