Sitting On The Other Side Of The Table

What I have learnt during my time as a VC analyst and how you could improve your first call pitch.

As an Analyst a good chunk of my job is to have first calls with start-ups with the goal of then presenting them to the rest of the investment team. These calls help me better understand what founders are building and if ultimately we are both, fund and start-up, a good fit for each other.

Although you can’t underpitch a good start-up, your pitch is crucial in helping build conviction internally at the fund. Therefore I thought I would share my pearls of wisdom, however few, on what it is like to sit on the other side of the table.

Starting the Call & Introductions

Sometimes overlooked, the introduction phase tends to set the tone for the call but is also an opportunity to cover some important details that you might want to know.

The first thing I always do when starting a call is to ask how the founder’s day is going. I also try to share something personal about my day as a way to nudge founders to do the same. Whenever a founder reciprocates it makes for a much smoother call as it breaks the ice allowing founders to relax.

Secondly, the start of the call is also an opportunity for you as a founder to get some crucial information on an investors’ thesis, ticket sizes, investment constraints, due-diligence process, due-diligence timeframes and how investors can add value. I try to mitigate this by going over these points at the beginning of the call, it is always worth asking if investors have failed to cover something. Some founders like to tackle these questions at the end of the call, but there is rarely time at the end to cover these points. The beginning is always an ideal time to do so.

P.S.
If you feel like asking the above questions might harm your credibility, don’t. Investors are also there to pitch you so if investors take it the wrong way, see it as an exercise in self-selection.

Format

Oddly, the most common question founders always ask me following the introduction is how I would like them to present (by powerpoint or via a free flowing conversation). I say oddly because it is the story that counts.

If the founders themselves feel they deliver their pitch more effectively with a powerpoint presentation, then I am comfortable with them doing so. As long as I leave that call having a strong grasp of what you are doing, I don’t care what the delivery method was. In all of my calls I’ve seen free flowing pitches that trump a good powerpoint pitch and vice versa.

So find your jam and stick to it.

Another contentious call format element is whether one, many, or all co-founders should be present in a first call—since the first call is really about understanding your business.

Some investors say you only need one co-founder. Arguing that having competing voices or co-founders that don’t talk in the call is not an efficient format. I would agree with that logic but I have seen effective cases where having another co-founder on the call can lead to a more effective pitch.

If you feel that having your technical founder on helps you tell your story more effectively, do include them—I would make sure it’s clear who is communicating which parts of the story.

Content

Before delving deeper into content, here’s a disclaimer on my view on content: As a pre-seed/seed investor we have a particular lens that we look at start-ups through.

Particular elements of your story you need to emphasize vary by the investment stage you are in. What drives conviction for an investment at the pre-seed and seed stage is different to Series A/B. So, please take this section with a pinch of salt.

In my experience, the best pitches always start with an introduction about you as a team. Founder conviction is a major driver for VC investment decisions so please introduce yourself and your founding team early on, ideally not waiting until slide 8. In a thorough read-through deck, it’s logical to present your team later, after I’ve determined our potential fit. However, once you are in the call this should be the first thing you present content wise.

When looking at the team, I am seeking a founder problem fit and founder market fit. The first thing I want to understand from the founder’s presentation is why this problem is a problem close to their heart and how well they understand the problem based on their experience.

Secondly, I want to assess how well the founder understands the market they operate in and the incentives of their customers. If a founder doesn’t know the problem or the market they operate in well, it’s hard to build conviction. So make sure to use the beginning of the call to really show your great knowledge and passion.

Following the team product is something vital for an investor to understand, since they will have to describe exactly how it works to the rest of the investment team during the investment meeting. Here I try to understand the customer journey and how each individual feature fits that journey and the value of the pain point served.

Once I have understood the two elements above, what I need to understand is:

• What you have achieved traction wise (where your start-up fits in the start-up life cycle)
• Your market context (what is the size of your market and who are your competitors)
• The round valuation

These again are all sense checks as they should be already effectively covered in the reading deck.

Finally, Closing Off the Call

The end of the call, time permitting, I feel is always a wasted opportunity by most founders. An approach I have seen some founders make is to use this time to ask investors what their view on the business is and asking if there is anything they would like clarified. Not only will this iteratively help you refine your pitch, but it’s also an opportunity to gauge interest.

Besides understanding the investors perspective, the end of the call is always an opportunity to ask any lingering questions you might have and to ask when it is a reasonable time to hear back from investors.