Pitch With Confidence: This Is The Secret To Winning Over Investors
Eurie Kim is General Partner at Forerunner Ventures, an early-stage investment firm that focuses on the commerce space. Eurie has 15+ years of investment experience and is a champion for female founders—she is a founding member of AllRaise.org, which aims to increase the number of female general partners and female founders in the tech industry over the next ten years.
Gwen Cheni is Partner and Portfolio Manager at Pier 88 Investment Partners, a hedge fund focused on investing and innovation. She is also a mentor to several startups and accelerator programs and an angel investor in Seed and Series A.
Eurie and Gwen shared their secrets to winning over investors through a confident and credible pitch at the 2017 PE Summit in San Francisco (their responses have been edited for brevity and clarity).
Paint a Big Vision:
“Women will tell me exactly what their product is, but not tell me why I should be excited about it,” says Eurie. Instead, female founders should work to build a big vision and really capture an investor’s attention within the first minute of their pitch. The vision should be big enough that “I [as an investor] should want to come talk to you,” says Eurie.
Know The Problem You’re Solving:
According to Eurie, there is one question female founders must answer confidently in order to win over investors: what’s the problem you’re solving and how? “This is really important in order to get at the credibility,” says Eurie. “What’s differentiated about you and your approach? Because most likely, the investor you just pitched has heard this idea four times.”
It’s also important that female founders share how they’re solving a problem, and how much traction they’ve already achieved. “It’s important to say where you are now. Are you fundraising? Are you selling? Do you have metrics? Do you have traction? Did you use an NPS score? Quantifying what your business traction is also helps figure out what stage you’re at,” says Eurie.
Know Your Audience:
One of the most important things to do if you want to be seen as credible and confident as an investor, is to actually spend some time getting to know who you’re talking to. Knowing your audience is really important, according to Gwen. “You don’t want to spend all weekend researching someone, but spend thirty minutes.”
The basic questions you should be able to answer [about an investor] are “What vertical? and ‘What stage?” says Gwen. “You don’t want to go pitching to someone who is investing in Series D and E right before IPO when you’re at the seed stage—it’s just going to be a waste of both of your time.”
Part of knowing your audience is knowing what kind of investor you’re pitching. “[VCs and Angels] looks for very different things,” says Gwen. “Angels are probably going to be able to move [more quickly]—they are able to take on bigger risks, but the check sizes are going to be smaller. And then there are ‘lifestyle’ investors; they don’t need a 100x [return], but they probably need a very steady 15 percent.”
Lastly, get to know what gets the investor you’re pitching excited. Female founders should be able to pitch according to “what I’m thinking about, and what’s going to excite me [as an investor] versus what you want to tell me,” says Eurie. “A lot of women come in [to pitch me] and they just start talking, and they’re not gauging if I’m even interested…or to see if I have a question.”
Talk About What Makes You Credible As A Founder:
Studies have shown that female founders are asked different questions when pitching VCs, making it more difficult for women entrepreneurs to raise money than their male counterparts. “When VCs are interviewing women, it’s a lot of ‘How do I prevent a loss?’ rather than a focus on the big picture, so you have to cite your credibility,” says Gwen. “You can say, ‘I was Co-Founder or Co-CEO of this company,’ or ‘I generated $1M in revenue in a year from $0.’ “
“[Your] background is really important,” says Eurie. You should be able to sell an investor on why you are the right person to solve this problem. “We ask that in our longer pitch meetings—there has to be a slide on ‘why you’ and why you’re the best person to tackle this problem,” she says. “Even if you haven’t worked in this industry before, hopefully there’s another reason why you’re so passionate about [the problem you’re solving]. Being an entrepreneur is really hard, so hopefully there’s a passion that comes from somewhere so deep, it makes up for how hard it is.”
Talk About What You Know Best:
According to Gwen, another way to pitch with confidence is to talk about what you know best. It’s okay to build credibility with an investor by starting your pitch with the market and your product. “You’re going to know your product market and the size of the market. The bigger the market, the more challenges you’re going to have, so making sure you can anticipate those questions [about other competitors], the more it’s going to come across that you’ve actually done your homework.”
Eurie’s and Gwen’s advice comes from their San Francisco #PESummit17 workshop, “Crafting a Pitch that Establishes Your Credibility.” Listen to the entire workshop on episode 58 of our podcast, and subscribe on iTunes, Google Play or SoundCloud.