7 Tips For Preparing A Successful Pitch

funding, fundraising, PESummit, pitch, technology, venture capital

Sonia Nagar is Vice President of Pritzker Group Venture Capital, a venture firm that focuses on Series A and Series B investments. She is also an engineer (she worked at Amazon) and a tech entrepreneur who developed a mobile shopping app that was eventually acquired by RetailMeNot. At the 2017 PE Summit in Chicago, Nagar outlined the elements of the perfect verbal pitch and reminded female founders that building relationships with investors is key when fundraising.

1. Become a storyteller.

Nagar likens putting together your pitch to “directing your own movie.” You want to make sure that there’s a clear protagonist (you), problem that needs to be solved, and solution, which ultimately is your company, your product or service, and the team that’s behind you, which includes the other investors (the syndicate) going in on the round.

Use storytelling to prove what Nagar calls “founder-market fit” and present the data points necessary to prove to investors that you’re worth the investment. “We want to understand why you are the best person to go after this market and build the solution,” says Nagar. Crafting your company’s story is also important after the pitch is over—after you’v raised funding, your story will help get people to join your team and help you sell to customers.

2. Know your audience.

“Research the firm and the person, more specifically that you’re meeting with,” says Nagar. “Not all investors invest in all things.” Nagar suggests looking at a VC’s previous investments or Linkedin profile to discover previous investments and industries that may be of interest to the VC with whom you’re meeting.

3. Bring data to the table.

While storytelling is important, Nagar doesn’t want founders to forego sharing hard numbers for the sake of telling a story. “Even if a story is good, if there isn’t data, you lose me. I’m worried that you’re hiding the data because it isn’t very good.” Instead, include data that convinces an investor you understand your market and customers like what you’re building.

Nagar shares a few different ways founders can prove product-market fit: overall revenue traction, customer retention (or repeat customers), referral traffic, and the Net Promoter Score (NPS), which is an index of how satisfied customers are with your product or service.

4. Go after a really big market.

If given the choice between investing in a company that’s in a larger market versus a smaller market, VCs are going to be more interested in the company in the larger market. However, Nagar cautions founders against inflating the size of their market based on future offerings. Instead, Nagar suggests dividing your market down into what she calls the segmented addressable market, which is the number of people that you can actually reach with your original product.

5. Get a handle on the competition.

According to Nagar, there are two things that VCs care about with regards to competition: where your product fits in the market landscape, and your product’s competitive advantage. “VCs want to understand what will keep other players from entering the market after you, what will prevent existing players from switching [into your niche market], and what will prevent larger players from entering the market and crushing you,” says Nagar.

6. Have an exit strategy.

Ultimately, VCs don’t see a return on their investments until your company has an exit. An IPO (Initial Public Offering) is the goal, but the majority of companies are acquired. Nagar says laying out for investors the companies that may be interested in acquiring your startup, as well as pointing out similar transactions that have happened, that can be a really interesting way to convince a VC to invest.

7. Start building relationships early.

“You don’t want the first time you meet with a VC to be you asking them for money,” says Nagar, referring to the famous Mark Suster article Invest in Lines, Not Dots. According to the article, ideally founders should build a relationship with a VC over time, keep them up-to-date on the business with periodic check-ins, and build trust by demonstrating traction. “Start your meetings [with VCs] six months before you think you think you’re ready to raise. Then three months before you want to have money in the bank, kickoff your process staff all your meetings. Ideally these are people that you’ve warmed up and gotten to know over time, so you can very quickly get a sense for whether they’re interested or not because they’ve gotten to know you.”

Sonia Nagar’s advice comes from her workshop, “The Perfect Verbal Pitch,” which she facilitated at the 2017 PE Summit in Chicago. Listen to the entire workshop on episode 46 of our podcast and subscribe on iTunesGoogle Play or SoundCloud.