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How to Craft Winning Investor Pitches 👏
Stephen Moore
January 09, 2024
Hey readers! Our EH weekly newsletter is back after a short holiday break (yes, even entrepreneurs should enjoy the holidays). You can once again look forward to insightful lessons and practical takeaways delivered to your inbox every Tuesday.
In this week’s edition, we discuss:
How to craft pitches that will catch investor’s attention
The Startup Fundraising Playbook for 2024
How to craft winning investor pitches 👏
Amu Fowler, founder of Startups Ignite, has seen hundreds, if not thousands, of decks. The #1 repeating mistake she witnesses is that the customer's story is incomplete or entirely missing.
Of course, just because the story is missing from the deck doesn't mean the story doesn't exist. You just need to tell it.
Thankfully, she dropped a few pointers to help you craft pitches that will catch investor's attention:
Know your story, own it, and tell it — Investors don't remember data; they remember stories. If you want your deck to stand out, eliminate everything unnecessary, deliver a core message with a strong narrative, and lay out a sequence of slides that builds on the next.
Win in your mind first — What you think internally will come out externally. When you aren't confident about a part of your startup, explore it, then own it. If you hide from it internally, you'll try to cover it up externally, and in general, we can smell a cover-up job. Investors are more likely to accept you when you've accepted yourself.
Show credibility, connect emotionally, and show evidence — It's not what you say but what others remember that matters. That means you need to establish trust (credibility), connect with investors on values (emotion), and finally give the reason and context (evidence).
Finally, treat your pitch deck as a storyboard — Who are the heroes, what is the hero's journey, who is the team, what is the contest, and what is the victory? You can change the order of the story and explain the elements across multiple slides but try to keep the slides within 10–15 slides, making it scannable and visually pleasing.
👉️ Want the visual examples? Dive into the mind of the over-pitched investor and learn how to pitch your story.
The Startup Fundraising Playbook for 2024 📖
Fundraising is different for each startup and very different in each stage of that startup.
However, there are principles that every founder should know before raising. Farokh Shahabi has been on both sides of the table and shares everything he wishes he'd known before fundraising, including;
Know when to raise — Rookie founders want to raise to reduce their risk. Seasoned founders know that raising money at the wrong time is a costly distraction. Only consider raising investment when your house is in order; raising won't solve deep-seated issues and is time-consuming.
Pre-Seed / Seed vs Series A — From Series A, VCs want to invest in well-established, growing businesses. Businesses that are scalable like startups but are a well-oiled machine, sustainable, and not super risky. At the seed stage and earlier, VCs are not investing in a business; they're not even investing in an idea, they're investing in the team.
Hero vs zero — 8 out of 10 startups that successfully raise money still fail in the next 2–3 years of their life. Early-stage VCs and investors have one objective: finding hero startups in the sea of zero ones, the ones that will eventually turn into a zero-dollar valuation sooner or later.
Show that you're a pro — VCs love founders who know their shit. They hate it when a founder doesn't know their competitors. They hate it when founders brag about unimportant stuff or wrong KPIs. They hate it when they have to explain basic startup terms to a founder. These are all red flags for a VC.
Start small — A great approach to fundraising is not to start with the big names. Start with smaller VCs. This way, you can practice pitching and become a pro at it, and find the real issues with your business model, product, and marketing that you can fix as you go.
The Cap Table is your baby — Raising from the wrong investor is one of the main causes of death in startups. A wrong name on your cap table might equal never raising money again. The reputation of each investor, their track record, and their role in growing the company are the crucial things to pay attention to from the beginning.
👉️ Read the Startup Fundraising Playbook for 2024 for a deep dive into how to raise capital in 2024.