16 Rookie Errors Founders Make Pitching to VCs — And Passing the “20 Minute” Test

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Given that so many VC pitches are over Zoom now, I thought it would be worth refreshing this classic SaaStr post on things it’s easy to get wrong when pitching investors.

Pitching VCs is like anything. You’ll get better at it over time. Later, you’ll even get great at it. Once you know how it works, it’s not even that hard to knock it out of the park.

But until then, so many founders make unforced errors. Rookie errors. Here are 16 that you can easily avoid / fix right now today. Before your next pitch:

Cold emails work. But they need to be truly awesome. Every part of them. At the recent New New in Venture SaaStr event, we asked many of the top VCs, from Aileen Lee to Keith Rabois and more, if they read cold emails. They almost all say that they do, and in fact read almost all of them. So don’t listen to anyone that tells you cold emails don’t work. VCs are in sales themselves, and they are hunting for that next great deal. But a cold email especially has to be awesome. The email subject line. The email itself. The deck. It has to stand alone. A cold email has to be so awesome, anyone would want to invest. Or at least instantly want to learn more. More here.

Being cagey with answers. Just answer the question. How much are you raising? Where are you in the process? Being direct (and honest) builds trust. With VCs, you want to build trust quickly, if you can. Especially over Zooms.
Bringing the wrong people with you. Do not bring “consultants” to a VC pitch. Do not bring anyone with you that isn’t part of the senior team. As soon as you bring a “consultant” with you — most folks are out. It makes the team look weak and incomplete.
Not sending the deck ahead of time. Just send it. You are wasting both a lot of time, and an opportunity, by not letting VCs do basically homework ahead of time. Make it easy on them. And send it as a PDF. Generally, don’t send it to through some “service”. Build trust. Make it easy. If you are the one selling, don’t put hurdles in front of getting a check. Remove objections. Send the deck. Even if they might email it to someone you’d prefer they didn’t.
Not doing at least basic homework on the VC firm. You should know their other investments in the space. VCs may be fungible, but no one wants to feel that way. Share why your start-up may be of interest to them based on other investments. That’s, again, Sales 101. And you are selling shares of stock. It’s still sales.
Spending more than 2 slides on “the industry”. Do not do this, unless asked. Assume VCs understand what is “happening in the cloud”. This not only is a waste of precious time … I’ll fade away.
Going in too strong. If you have 2 signed term sheets, for sure, go in strong. It saves everyone time. But being too aggressive, too take-it-or-leave-it, if you don’t have options — is a big mistake. Creating urgency is part of sales, for sure. But you don’t want to push it too hard. When in doubt, just be transparent with timing and expectations.
Going in too weak. Telling me you could succeed “if only you could raise $____” is just the wrong message. Winners always find a way to win. No matter how hard it is.
Asking for coffee to “share notes”. Some VCs may want to do this, but most don’t. I personally don’t have time. Show me a product I want to invest in — I’m in. But coffee? I already drink 4 cups a day. I don’t need a 5th.
Hearing about how the founders met in elementary school. Even if this is true, I don’t want to hear it, at least not as a part of the core pitch. That’s not a positive for me. I want to hear why the founders are amazing.
Not answering the questions. If I ask a question, there’s a good reason. Some VCs like to hear themselves talk. I don’t. Just answer it. If you don’t know the answer, tell me. Don’t tell me “you’ll get to that later”. Because if you do, that may well be too late.
Not speaking with data. Always speak with data, if data is there. Even if it isn’t great. I don’t want some qualitative answer, once you have even just 10 customers.
Claiming pilots, unpaid users, and anything similar are “customers”. They aren’t. And don’t claim they are MRR/ARR. They aren’t. Be clear what is a pilot, what is paid, and what isn’t. Otherwise, this blows up on you in diligence.
Hiding anything. It will come back to bite you. Some things may be more appropriate for a second meeting, but make sure whatever top level issues there are, come up in the beginning.
Poor understanding of competitive landscape. You have to get this right. You have to. First, always have a competition slide. Second, know it cold. Third, be respectful of any competitor larger than you. If you don’t understand the competitive landscape cold, then you don’t really understand the market — or what you are going after.
Not having the >first< slide sell the company all on its own. Just like every email pitch should stand on its own, so should the very first slide of your pitch deck. If the first slide is the only slide you need, if it sells the whole deal … then your odds go up. Elevator pitches are important. So is a “1-slide” pitch. Make that first slide count. Metrics, team, product, financial goals. Put it all on Slide 1. Position the company, and answer all my questions right then and there. Force yourself to distill the answer of “Why You Should Invest In Me” into 1 slide, the first slide.

>> Your job is to pass the 20-minute test. <<

To get a VC to want to invest no later than 20 minutes into the first meeting. Anything you do that handicaps a VC getting to a decision in less than 20 minutes dramatically decreases your odds of getting funded.