Do These 8 Things Before Pitching to a Venture Capitalist
Learning how to pitch to potential investors is an important skill for all young entrepreneurs. Venture capitalists want assurance that their money is going to someone serious and committed to building their enterprise. So, what can you, as an ambitious but untested young entrepreneur, do to prepare for your first meeting with a venture capitalist?
1. KNOW YOUR AUDIENCE
Not all venture capitalists are the same. Some specialize in tech startups, while others focus on the healthcare sector. Before you set up meetings, do your research. Make sure you’re looking for VCs that specifically invest in your type of business. Otherwise, you’re wasting everyone’s time.
Another thing to consider is what type of venture capital you need at this stage of your startup. Here’s a quick rundown of the types of venture capital available to you. Be sure to familiarize yourself with terms so you know what stage you’re in and what you should ask for.
2. KNOW YOUR BUSINESS
There’s a lot going on in the steps between having an idea for an enterprise and launching your business. Within those steps you’ll need to:
- Draw up a business plan
- Create a brand
- Define success
- Develop entrepreneurial skills
Successful pitching includes knowing your business inside and out. You’ll be asked a lot of questions. The smart young entrepreneur will walk into a pitch meeting prepared for anything. Remember: no one knows your business as well as you do. Be prepared to answer questions about the how, where, when, and why of what you’re doing. Who are you? Why this business? Why should they believe in you? What will your business accomplish?
3. HAVE A MESSAGE
Your message isn’t quite the same as your business plan. Business plans include goals, timelines, and targets. Your message is what draws in customers.
VCs are like your first customers. How will your product or service make their lives better, easier, or happier? Why should a customer choose you over someone else? What advantages do you offer?
Let’s say you’re starting a service that offers fashion tips for your fellow teens. Your message might be something like, “Style advice for every teen, at every budget.” It’s short, it tells what you do and for whom, and it’s memorable.
While VCs will have a lot of questions for you, focus on the task at hand: getting them to believe in you and your business. They don’t care about every little detail. They don’t need to know your life story unless there are details that are relevant to your business. (For example, you helped your grandmother get connected online, and now you want to start a business helping other senior citizens do the same.)
Otherwise, stick to business and stick to the most important and useful facts. The VC’s time is important. So is yours. Don’t waste it rambling or going off on tangents.
5. PRACTICE, PRACTICE, PRACTICE
If you want a VC to feel confident in you and your business idea, then you need to exude confidence first. The best way to do that is to practice saying what you need to say over and over again. Practice in front of a mirror. Take a video of yourself and spot places where you fidget too much or slump your shoulders. Rewrite your pitch if there are words that trip you up.
By the time you get an audience with a VC, your pitch should roll off your tongue as if you were saying your own name. For some of you (we’re looking at you, theater kids), this will be easy. For others, you’ll need to practice a ton before your appointed meeting.
6. BE PROFESSIONAL
Even if you’re pitching to friends or family, it’s important to maintain a certain level of professionalism. Clean yourself up. Dress for the part. Stand up straight and look people in the eye. Develop a firm (but not crushing) handshake. Practice speaking without a lot of “um”s or other filler words. Mind your manners. Refer to adults as “Ms” or “Mr” unless you’re told otherwise or are unsure of their pronouns. Show up 5-10 minutes early. Be kind to every receptionist, assistant, and intern you meet. Don’t dump your personal problems on the VCs. Don’t badmouth other businesses. Don’t complain. Avoid slang, cuss words, and offensive terms. Be confident without being arrogant. Assume they want to help you, but don’t assume they will help you.
7. LEARN TO TAKE ‘NO’ FOR AN ANSWER
Sometimes the VCs will turn you down right away. Other times you’ll have to wait what feels like an eternity just to end up rejected. It happens.
The best thing you can do if a VC says no is to take it with a smile and walk away. Don’t pester them with emails asking what you did wrong. It’s not their job to give you feedback. (If they do offer feedback, be gracious and thank them, even if you don’t agree.) Certainly, don’t threaten them! Thank them for their time and consideration. Then let it go.
8. TRY AGAIN
So you’ve been turned down by the first VC you pitched. Or the 10th. It’s easy to get discouraged and want to give up. This might be a good time to take a break so you can refresh and regroup. Hang out with people who can pump you up again. This will give you the boost you need to face your next VC. Every “no” is one step closer to a “yes!”
Learning how to pitch to venture capitalists will prepare you for a lifetime of entrepreneurship. You’ll gain confidence in yourself, learn how to speak to a room full of adults, develop a budget, and sell a business idea. These skills will follow you through college and beyond. And who knows? Maybe one day you’ll be the one sitting at the head of a conference table while an up-and-coming young entrepreneur pitches to YOU!
Find out more about the Kantner Foundation, including our college scholarships for young entrepreneurs in Florida, by clicking here. We look forward to your application!