How to run your first meeting with a VC

This article is a summary of Episode 4 of Uncapped Notes, our video series to demystify venture capital and the startup ecosystem for first-time founders. Below is a summary of the episode. If you prefer to watch, you can see the episode here. It’s 5 minutes long.


Eric Bahn (co-founder of Hustle Fund) received a piece of advice from his dad before a first date:

“Speak only of pleasantries.”

It took Eric a while to understand this strange advice. Basically, his dad was saying that a first date isn’t the time to over-share about his aunt with mental health issues, or her history of colon cancer.

That’s not sexy. Or relevant. 😅

Instead, Eric’s dad wanted him to showcase his attractive qualities, and only open up the kitchen sink once the relationship progressed.

Well, it worked.

Eric ended up marrying that woman.

Best part? His dad’s dating advice also applies to pitching VCs. Don’t overwhelm them with too much detail. Speak of your pleasantries.

Specifically, here are five things you want your VC to understand:

  1. Team
  2. Problem
  3. Solution
  4. Market
  5. Traction

The latest episode of Uncapped Notes covers exactly this. Read on for tips on how to make your first pitch to a VC absolutely extraordinary.

 

How to describe your team

Share why your team has the relevant skills to solve the problem you’re working on.

For example, if Eric and Janel come from clinical science backgrounds and want to create a new COVID vaccine, their backgrounds sound credible.

But if Eric and Janel were marketers at Salesforce and they decided to create a COVID vaccine with no clinical science backgrounds, investors (and people in general) would find that a bit weird.

TL;DR: explain why your team has founder-market fit.

You should also share why you and your co-founders work well together. Ideally, you’d have a track record of working together, or shipping something together.

Why is this important?

Well, a big reason founders break up is because they haven’t worked together for a long time or gone through the grind.

 

How to describe the problem you’re solving

Beyond your one-liner about the problem you’re solving, talk specifically about your customer research process.

  • How did you arrive at your problem statement? 
  • Did you talk to hundreds of customers? 
  • What survey data do you have?

Show that you have some kind of obsession around deeply understanding the nuances of the problem.

This sets you leagues apart from a normal founder solving the same problem with no intrinsic desire.

 

How to describe your solution to the problem

If you’re a first-time founder in the early stages, your product or service is likely terrible right now.

That’s OK.

VCs are not expecting perfection from anyone who has barely graduated from the idea stage.

When you explain your solution, don’t focus on what you have right now. Instead, sell them on your product vision. 

  • What will the next six months or year look like?
  • What are the milestones you have set for yourselves along the way? 

Be clear about your first steps in order to communicate your vision to investors.

 

How to describe the market you’re serving

Let me tell you a secret: VCs want to invest in multi-billion-dollar markets.

They are looking for companies with the potential to be acquired or IPO for billions of dollars.

VCs know that most of their investments will return $0. But the few companies that do succeed will make up for the entire value of the portfolio.

VCs need to swing hard with every investment they make into founders who have the ambition to grow into a huge company.

Show the VCs why you are the kind of founder who will make it big in a market that can be measured in the billions.

 

What traction will impress VCs?

If you’re really early, you may not have much traction yet. But even having a couple of users with some data on retention can go a long way.

If you’re a SaaS company, having signed contracts before you launch or a pilot group in progress shows you have some promising traction.

Selling before you launch demonstrates that your team has the capability to build an audience.


 

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