When you are pitching your company, it’s tempting to dwell on the solution you’ve created — usually in the form of your product or service. Don’t — it doesn’t matter.
A common problem I see in pitches is that product-focused founders are spending too much time talking about the solution they are building. That makes sense.
In the context of a pitch, founders spend most of their day-to-day efforts on tasks and activities that cover three ‘slides’ — Who your customers are, what the problem is they are experiencing, and the solution you are building for them. That makes sense; that’s where you’ll be focusing most of your time and attention in the course of building the company. When pitching your company to investors, however, it’s a different story.
Your VC is ‘selling’ money and board-level advice. They are ‘buying’ a percentage of your company. Keep that in mind as you weave your pitch narrative.
When pitching, remember that you need to keep your audience in mind. Of course, if your customers are ambivalent, the problem is non-existent and the product is terrible, your company will fail. And if all of those things are true, you will probably fail to raise funding.
Bear in mind though, that a VC firm has its own business model. The Limited Partners (LPs — the people investing money into the venture fund) are on one side of the equation, and the startups on the other. The ‘problem’ VCs are trying to solve is that their LPs have invested money in the venture fund, and they would like an outsize return on that investment. The ‘solution’ they are providing is the investment thesis — the theory behind why they are investing in a certain stage and type of companies.
From a founder’s perspective, your VC is ‘selling’ money and board-level advice. They are ‘buying’ a percentage of your company. And while many VCs are passionate about helping startups, ultimately their fiduciary responsibility is to their own investors — the LPs.
If not the product, where should you focus your attention?
Of course, your startup has to fit within the investment criteria of the VC firm. If you’re pitching a medical tech company to a crypto fund, that’s a waste of everybody’s time. Assuming you’ve done your research and figured out who you are pitching to, keep in mind who your audience is. A product is easily amended, pivoted, or refined. The top three things investors really care about is simple:
- The quality of the team (are you the right people to solve this problem?) and the ability to attract great talent (can you attract more people to help you fulfill your mission?)
- The size of the market — and whether it’s growing.
- The problem you are solving — and whether it’s worth solving at venture scale.
All of which isn’t to say that investors don’t care at all about your product — they do — but when you are at the earliest stages of pitching, they only care in the context of answering the above questions. The product you’ve built to date shows how you make decisions, and whether you’ve been able to attract early customers. It is worth pointing out that after the investment has been made, things shift; the solution and the product (alongside the nebulous work of ‘company building’) come into sharper focus.
As a founder, of course you are passionate about the solution you are building. When pitching, keep in mind what the driving forces are for the audience. Your goal is to raise money, and the amount of time you have to pitch your company is extremely limited. Make it count.
Haje is a pitch coach based in Silicon Valley, working with a founders all over the world to create the right starting point for productive conversations with investors — from a compelling narrative to a perfect pitch. You can find out more at Haje.me. You can also find Haje on Twitter and LinkedIn.
Your investor doesn’t give a shit about your product. was originally published in Pitch Perfect on Medium, where people are continuing the conversation by highlighting and responding to this story.