Raising VC is one of the most confusing parts of being a founder. Before co-founding Jam, I was really lucky to spend a few years as a VC at Union Square Ventures and watch hundreds of founders pitch. Of course there's no one good way to raise, but here are 8 things I saw the best founders at fundraising do.
Of course, given the extremely challenging market today, these tips are like:
But even polish can make a big difference and so, here we go – 8 tips I learned as a VC about how to pitch investors and raise your seed round. 👇
1. You are in the business of giving a good meeting.
The most important thing to understand is when raising your seed round – you are in the business of giving good meetings.
Think about the last time you interviewed a great job candidate - what made them stand out? Probably the meeting was interesting, high energy, and they gave good, short answers. Probably they asked you questions too.
That’s exactly the way to think about a pitch meeting. Like candidates interviewing for a job at your company, your job is to deliver a memorable, interesting, “good meeting” that makes the other side want to work with you.
Of course, a good meeting isn’t everything (just like when interviewing candidates), but it can make a big difference, especially in early stage, when many investors are more investing in the team than the specific idea.
Thinking about pitch meetings in this way (“you are in the business of giving a good meeting”) can help reason about different decisions you may make in relation to these meetings.
For example, should you travel to pitch in person? Well, what will give a better meeting - on Zoom or in person? How should you start your meeting? What’s a better meeting? (We always kick off with a demo, it’s a better meeting).
2. Jump right in, especially in a remote pitch meeting.
The worst part of any video meeting are the first 5 minutes. That’s why you should prepare an answer to “How are you doing” that’s preferrably about your business.
Imagine these two calls:
In one call, the VC joins the call and asks the founder, “How are you doing?” The founder responds, “Good, we’re having good weather here in New York today.”
In another call, the VC joins the call and asks, “How are you doing?” The founder responds: “Great, I just saw the first demo of a new feature we are building, and it is so awesome. Can I show you?”.
In the first, the meeting is standard, the VC is left having to steer the conversaton and at some point the conversation will need to make an awkward segway to the “pitch” part of the meeting. In the latter, the conversation jumps right in, the founder is leading the meeting, and there’s no need for an awkward switch over to talk about the business. It’s novel, memorable, high energy, and gets the interesting discussion going right away.
3. Keep your answers short.
This is great advice Albert Wenger, partner at USV, gave me before we went out to raise for Jam.
Not only do short answers keep the meeting engaging and even show confidence, often times VCs are just asking something to see if and how you’ve thought about it. For those reasons, a short summary answer with an offer to go more in-depth is often preferable (e.g. “Here’s how I am thinking about it at a very high level, happy to go more into it if you’d like.”).
4. Send the deck ahead of time so you can skip it during the meeting.
When you are fundraising, you are in the business of giving good meetings.
Good meetings are novel and engaging.
Being walked through a deck is typically not novel (happens in the majority of pitch meetings), or engaging (presenting is one-way communication, and doesn’t give many opportunities for the other side to contribute). Especially over a Zoom meeting, once you are screen-sharing and walking through a deck, it can suddenly feel like you are passively watching a webinar.
Having said that, it’s great to have your deck on hand so you can pull up any reference slides when needed. That makes you look prepared, too, as a plus.
5. Be collaborative.
After a long day of back-to-back calls, which of your meetings are you still thinking about into the evening? Probably the one that got you ideating and thinking about interesting questions and new ways to view the world.
Bring them in, ask for their opinions and their ideas. Give them interesting prompts to chew on, and get them thinking.
Imagine one call where the VC asks, “How are you thinking about monetization?” And the founder replies “We are going to charge $X for Y.”
Imagine another call where the VC asks, “How are you thinking about monetization?” And the founder replies, “Here are two avenues we are testing right now, I would love to hear your input, which do you think will work best? Is there another test you think we should run in parallel?”
Most VC's love startups, and love working on them. They find them interesting. If you can get them thinking about your startup in a collaborative and constructive way during the call, they will hopefully walk away thinking they really enjoyed working with you on your startup in that moment and feeling like they want to work with you again.
6. It never hurts to start early.
Fred Wilson wrote a great blog post on this topic called “Advice and Money”. Often times when raising, founders find that when they ask for advice, they get money, and when they ask for money, they get advice.
It’s not always true, especially in a down market, but it never hurts to try.
When you start investor conversations before you are officially fundraising, you can be less formal, chat about the business, just asking for advice. In the best case scenario, you can be done fundraising early. In the worst case, you now know a couple of great folks you can reach back out to when you are actively fundraising (not a bad outcome!).
Don't believe me that advice can lead to money? This clip from the Build with Blake Bartlett podcast is a good example:
7. Urgency creates urgency.
Which job candidate do you move faster to close – one who is running all their interviews in parallel, or the one who is casually exploring their next job, but doesn’t have a timeline to decide yet? Which candidate do you work harder to close, the one who has another offer or the one you know is interviewing but is not receiving offers?
It’s not rational, but it is relatable.
When you book your fundraising meetings over the course of many weeks, you are creating less urgency than if you were to book your fundraising meetings over a shorter, more compact period of time.
8. Don’t forget to ask the VC’s questions, too.
If you’re in a lucky enough position where you get to choose which VCs you will work with, it’s important to choose people who you feel aligned with, and trust to join you and your business for the long term.
In some ways, investors you choose are like the longest-term hires you will make. They will be with the business until the exit.
Raising can be extremely challenging, in any environment. But it is also hopefully enjoyable too. Best of luck, I hope you have fun pitching, and learn lots!