The Key Steps for Startup Founders Pitching to Venture Capitalists (VCs)

By Fernando Berrocal

Many professionals throughout the world aspire to found and grow a business startup. However, you must know that building a business from the ground up and taking it to the stars on your own is a very difficult and complex process. Bootstrapping, the practice of self-funding and developing a business, can be extremely draining both financially and emotionally.  Furthermore, there is no assurance that it will be successful in the long run. 

Pitching to Venture Capitalists (VCs)

Many businesses attempt to obtain financing through venture capital (VC) to address this specific challenge. It is possible to gain sizable funding windfalls by persuading venture capitalists to invest in your business concept, although most often this will cost you a percentage of equity. This strategy is far from infallible, and the majority of businesses continue to struggle to sustain their funding over the long term.

Keep in mind that around 90% of all startups eventually fail during their years on the market. There are many several reasons why this occurs. The top six causes account for more than 50% of all instances of business closure. 

  • No market need actually existed for the startup’s product/service.
  • They exhausted their funds. 
  • They never found the right team.
  • They were outperformed by another company.
  • Cost and/or pricing difficulties thwarted crucial progress.
  • The product/service was simply low quality.

Venture Capital

As evidenced in the above list, one of the primary reasons a business concept fails is running out of money. Only a small fraction of entrepreneurs can personally guarantee money for their business endeavors.  Thus, VC investments have become a crucial option for the majority of founders. But how can business owners improve their attractiveness during such a demanding procedure? And what feasible actions may be made to enhance the likelihood of success? In the following paragraphs, we will take a closer look at some fundamentals for VC pitches that all business owners may use.

1, Have a business plan in place.

Most businesses begin simply as an idea in the founder’s mind.  These entrepreneurs don't let their notion grow into a real, workable concept. This is one of the most fundamental prerequisites for any type of startup that intends to transform beyond a simple one-person endeavor into a successful venture. A business plan is just the first item that potential investors will consider when funding the expansion of a business. Additionally, the founders must create their business strategy.  This will be supported by accurate data, market knowledge, and early key performance indicators (KPIs).  These factors will show the way to profitability and growth for a business to the potential investors.

Some business owners allow themselves to become caught in the process of writing a business plan, but it doesn't need to be any more difficult than it already is. A successful business strategy doesn't have to be complicated; it may be an important text for stakeholders and investors alike if the content is detailed, well written, and honest in identifying potential risks and benefits. Make sure to spell out (in great detail) for everyone reading what your business objectives are, and how you plan to achieve them. Nobody wants to invest in an organization without knowing where it presently stands–and, most importantly, where it’s heading.

Secure Capital

2. Create a synopsis that appeals to your audience.

Another critical step in the investing process is the main summary. You must condense your idea into a brief pitch that can help to generate interest, rather than sending completely developed unsolicited business plans to the investors. When trying to capture an investor's interest, the majority of receivers will choose emails with a summary memo attached rather than in-depth business summaries, preferring to address the latter later on. 

In addition to this summary, consider creating a great pitch deck to present to potential investors.  It will serve as a compelling piece of further reading for individuals interested in learning more about your idea.  Solid decks also demonstrate in further detail how revenue will be produced–investors find this information highly appealing (more on pitch decks below).  

3. Make a persuasive pitch deck.

In order to produce a stunning pitch deck, entrepreneurs must find a balance between helpful information and attention-grabbing slides. VCs deal with endless pitches from enthusiastic business owners, so a simple PPT presentation with bar charts and cash flow estimates is unlikely to impress them. Entrepreneurs should aim to employ cutting-edge technologies to create an engaging experience for VCs.  Remember: you’re marketing your firm to them with the objective of securing an investment.  Structure your pitch deck to support a 10-minute presentation about the specific elements of your business.

You’ll find a wide selection of slideshow templates with business themes. Users may download charts and graph templates that allow them to showcase analytical content, while also finding helpful resources to showcase business plans and strategic roadmaps. Although starting a business without funding might be challenging, sites like powered template can ease the burden of your VC presentations by offering efficient custom pitch decks that will help your firm stand out from the rest. Having a strong pitch deck will only heighten your startup’s chances of attaining long-term success.

Ready to bring your startup to the next level? Apply to MassLight’s next batch. MassLight supplies capital and a dedicated tech team. We take equity in return. Have questions? Refer to our FAQ page

About Us

Started in 2000 in Washington DC, Masslight has served the DMV for 18+ years. We serve enterprises and startups with full-stack development and long-term project management services.

Contact Us

masslight logo
©2019 MassLight Inc.
Website by Oneness Co-Creative