Startups; your investor conversations have more impact than a glossy pitch deck

There’s lots of advice about what make a great pitch deck for meeting investors. However, to me the advice is simply about the obvious things. A pitch deck is like a CV – it gets you the interview but doesn’t get you the job. It’s the interview itself, which is the crux and likewise, it’s the pitch conversation that really matters.

Investors see thousands of new ideas and sit through hundreds of pitches; they’ve heard and seen it all. The fact that you’re here in a face-to-face in-person meeting means that you are doing something that has caught their interest – so make the conversation stand out.

And don’t make it just about the money. Come on, that’s like saying if I had one hour with Elon Musk, I’d spend my entire time trying to convince him to fund my water technology startup. Sure, it might be relevant to him, and it might be a great project, but even if I got his money, I’d still feel like it was a waste. Musk has an entire spectrum of useful thinking and perspectives to offer: What do you think is the most exciting thing in water technology today? What are the major issues in water that no one is solving? What projects is he currently evaluating? How have similar projects he’s invested in performed?

If I got him interested in me and my idea, Musk would go out of his way to provide me with tangible value. That’s what the conversation should be about, so make it an energised two-way dialogue, not an interview turning the pages of a PowerPoint one by one. Experienced investors have a lot to offer, more than just their chequebook, they are guardians of capital that fuels innovation.

They have a trove of data points and nuggets of wisdom from their interactions evaluating opportunities, leading deals, and advising portfolio companies. They’ve probably seen many similar types of ideas to your startup, so why not leverage that information to make your own venture better? Why should the conversation only be about your pitch deck content?

In one meeting, imagine learning about similar companies they’ve invested in, about the kinds of unit economics and growth rates they’ve seen, innovations in related markets that and how you stack up against them, and introductions to potential collaborations in other markets. Share the thinking and get inside a potential investor’s mind, don’t just hammer your pitch deck.

What investors really want is to get a feel for you – your judgment, your decision making and leadership style, your attitude to risk – all things about you, the founder, none of which are discernible from a glossy pitch deck. They are investing it you, so use the deck simply as your CV and the meeting agenda.

Here are ten things I’ve learned from twenty-five years of fundraising that have nothing to do with the pitch deck, and are all about you and your approach.

1. Know your audience Your pitch is a sales opportunity, so know your target customer, and it begins before you say a word. It starts with research of the firm and investor you are meeting and crafting a personalised conversation. Firstly, you have to understand their investment interests. Do they have knowledge of, or hold investments in your sector? What type of startups do they invest in – pre-revenue, early revenue, or at a revenue threshold? Have they had successes? If so, figure out their priorities and focus on addressing them.

2. Build rapport and find common ground Your pitch deck got you the meeting, they’re already warm to you, so let them get to know who you are and what you’re about outside of your idea. Investors want to know your character and a big part of that is what you stand for. Find some common ground and keep the conversation light-hearted before diving into business. Establish a personal connection and build energy from the outset.

3. Don’t jump in with both feet When you start the pitch, your first instinct is to jump straight in. However, instead of launching into your opening statements, start by asking a question: What is the most important thing you want me to cover with you today?

Before we get started, can I ask what specifically caught your eye in our pitch deck? This answer is helpful in focusing your conversation. For example, if they ask about market size, your tech or your team, you’ll know where to take a deeper dive. Opening with this question gives you the agenda and also helps gets them engaged early before you’ve begun to turn the pages. It helps to set a tone for a dialogue and a more intimate conversation, not simply a discussion on your deck content.

4. Don’t sell your product, sell yourself: Why you? Most of us dislike talking about ourselves, but an investor is asking What is your Founder-Market-Fit? They want to see you have a compelling and unique insight, and understand what about your thinking is contrarian i.e., why your startup will win.

Domain insights and experience really matter, investors won’t want to fund accidental founders or pay for you to learn about the problem you are going after. Investors like to back folks who have a high likelihood of success, so convincing you’re the right person to invest in will be the challenge you face.  Here’s the thing about pitching yourself: if you don’t think you deserve it, no one else will, either.

5. Your ‘Why?’ All investors will ask some version of the same question: Why do you want to do this? Most advisors will tell you to sell your passion, but here’s where I recommend you take it a step further. Look at the Simon Sinek Golden Circle Model: It starts with Why?

Start With Why is how you explain your purpose and the reason your startups exists. Sinek’s theory is that successfully communicating the passion behind the Why? defines your value proposition that will differentiate you from others. Ask yourself, how does your ‘Why?’ benefit the investor you’re talking to?  With this, you can clearly show the value you want to bring and why it is important to you, which will make it easier for them to give you a ‘yes’.

So, there are five initial aspects to an investor meeting that really have nothing to do with the pitch deck, but give you the opportunity to steer the agenda, and will enable you to start to stand apart from others pitching immediately.

Now let’s look at five things in your pitch deck we can take into the conversation and give them a unique twist and avoid pitch deck groundhog day.

6. Unpack your learning journey Stories without contrast are not interesting, and investors want to hear about your ups and downs. They want to hear how you struggled early on, what roadblocks you hit and how you overcame them, what customer conversations, pivots, iterations, and learnings you’ve had along the way. Showing how you recovered from setbacks shows more about your character – tenacity and resilience – and some emotion, rather than a constant stream of self-congratulatory pats-on-the-back. Make it a story.

7. Discuss your product in terms of market need Once you’ve engaged investors with your story, you need to convince them that your solution can gain traction in the market. For me, it’s a mistake to focus on the size of the market.

While investors like to see startups playing in large markets, there’s something that’s more important than size: you need to clearly articulate the market need you’re seeking to meet. As evidence of market need, provide qualitative and quantitative evidence. Also, recognise the competition. What you need to share with investors is how your product is superior to competitive alternatives. Failing to articulate how you plan to beat the competition leaves investors unsure about your ability to win market share.

Also, how do you stack up against X, the market leader? The context here is that they want to know how you are going to move the needle to a sustainable advantage. They accept you have potential with your innovation, what they want to hear is how you think you compare, one-on-one in a ‘David v Goliath play’.

One approach is to focus the thinking on a particular aspect of problem-solution fit around user experience. Your answer could offer a compelling strategy that neutralises rivals by overcoming or changing key aspects of user behaviour that will give you sustainable traction, targeting the vested interests of competitors in owning their relationship with their customers.

8. What’s your Blue Ocean? Back to my earlier point, when pitching, many entrepreneurs focus on the size of the ‘total addressable market’ and the market share they believe they can capture. But talking about the total market is invariably too broad to be useful.

Nearly every market is a frenzy of Red Ocean, where everyone competes on price. But you’re not competing on price, rather new value creation that customers can’t get anywhere else. So it’s not just about communicating the size of your market, you have to show investors where the Blue Ocean is, where there is market space without competition, and that you have found an entry point that others haven’t. In doing this, you articulate your value proposition clearly, and investors are going to listen to you closely.

Another thing to consider is how much of an advantage existing market share provides for incumbents in that market. For example, Hilton’s lead in the hotel industry over Airbnb in terms of assets was not much of an advantage, as Airbnb built their business on an asset-light marketplace model. 

9. Why now?  Timing is everything, and really understanding Why now? for your startup is vital. The startup graveyard is full of examples of things too early or too late to market – yet Uber wasn’t the first to think of on-demand rides, and AirBnB wasn’t the first to let people host visitors in their homes.

When investors ask Why Now? they are focused on understanding the market opportunity, dynamics, and context, the factors that will make a difference between success or failure. In responding, be confident but not strident. You only launch once, a moment in time where the technology and customer demand align to create the conditions for a startup to flourish.

Pitching the timing as much as the idea can help them decide to invest, even if they passed on a similar idea before. Investors are looking for markets where there has been a recent inflection point, which can be driven by a shift in consumer behaviour, a regulatory change – or your new tech innovation. What’s the market opportunity and why now? What is the economic impetus for this today? What is the tech catalyst that you’re introducing, enabling the new product experience?

10. Find The ‘No’ The usual focus is to get to ‘Yes’, but take the contrarian approach again. One of the best negotiation and communication strategies in sales is getting to ‘No’ because it saves time if the other party is just not going to buy, or it can create dialogue.

During the conversation, you should continue asking questions until you get a ‘No’. If you encounter an I don’t know, then you need to refine your approach. Keep moving and ask as many questions as possible to take you to a ‘no’, listening for the ‘no’ and using it as a negotiation inflexion point: find the ‘no’ to guide you to the ‘yes’.

The reality is that great startups sell themselves because of the belief in the founder, creating by the impression they’ve made in their ability to execute their innovation, so start off on that basis. Make it an interactive dialogue about you, not an interview around your pitch deck. If investors are interested, they’ll be the ones making their pitch to you.

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