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Pitching your early stage startup

Written by Patrick McKenzie for Stripe, Pitching your early stage startup is an article every early-stage founder should read, and re-read.

Know your audience

Put yourself in the shoes of the person receiving your pitch. They’re well-educated, savvy about startups, and sharp about business. They want to like you—this is a job for optimists.

Explain assumptions in your pitch like you would to a smart friend in a different field. Be explicit about connecting dots.

The investor is not your user, so pitching users and pitching investors are completely different. The investor will almost always be less knowledgeable in every way about the problem, industry, solution, and jargon. – MICHAEL SEIBEL, YC

Sell yourself and your team

Most businesses are not impressive at conception. That is what early-stage means. Reviewers will use you as a proxy for whether you will plausibly create a massive business given the opportunity.

Don’t sell yourself short!

Communicate concrete details

This pitch says nothing, in 18 words:

COMPANY will help e-commerce stores sell more products using cutting-edge AI-enabled algorithms and machine learning.

This doesn’t evince enough understanding of either machine learning or e-commerce to make a reviewer think the person who wrote it could successfully build this product. It also doesn’t say what the product actually is. Be particularly explicit about what the end-user experience looks like. Your reviewer is likely an early adopter and product enthusiast; they want to be able to envision themselves using the product.

Here’s the same product, in the same 18 words:

COMPANY built Google’s typeahead search box as a Magento plug-in. It boosts search-to-purchase conversion and AOV.

This is packed with concrete, compelling detail.

Concrete details allow investors to create pictures in their minds. If you do that, not only will I hear what you said, I will understand and remember it. There are many times when a founder says three sentences and my comprehension is less than 5%. Concrete details solve that problem. – MICHAEL SEIBEL, YC

Target an attractive market

Many investors want to invest in not just a winner in a large market but the winner. You want your success case to result in you dominating the market, not sharing it. This means both that you need to displace current players and that your product or go-to-market strategy need to be able to build a moat against someone doing the same to you.

Articulate how your company can get really big, and become a billion dollar company. Narrate how the story will play out if everything goes according to plan. – JUAN CAVIGLIA, MEITRE (W18)

Share unique insight

Your reviewer is smart but likely not an expert in your space. Reading your pitch should teach them things, including things which are not obvious to a well-educated individual. Much like conversations with customers, a novel insight leaves someone with a reason to remember you and think of you fondly.

Focus on nascent greatness

Many pitches look like “business plans”–an overview of every aspect of the company. Business plans, as an institution, can’t decide to optimize for breadth or depth and so optimize for shallow verbosity. You have very, very limited bandwidth. Focus it on the things you are great at.

A good pitch should have a clear narrative flow. What the future will look like and why, how we’re going to make it happen, and why we have the team and proof points to do it. It should tell a story, not just be a jumble of facts. – JOHN COLLISON, STRIPE

Highlight evidence of success

There are three hurdles regarding your metrics: do you know what you should be tracking? Are you actually tracking it? Are the numbers you have exceptionally good relative to the amount of time you have been working?

Ship a compelling prototype

At the interview stage, you shouldn’t rely on a demo, but it’s crucial that you have one ready to show in 20 seconds. Partners may struggle to visualize the picture you are trying to portray.

Have fun, but calibrate well

Many pitches have a sense of humor, optimism, and joy for life in them. This is a good thing to have if it is natural for you; don’t feel the need to make your writing more stilted simply because that would sound more professional. If you’re not naturally blessed with the gift of gab, you can work on your storytelling later; just write the facts like you’d describe them to a smart friend.

Get an intro if it would be great

Getting a warm introduction to a VC is a basic test of networking skills. … It turns out that the skill required to network into a VC is the same as the skill required to network into a customer, into a supplier, into a distribution partner, into the press, into an executive search firm.

Keep going regardless

If your pitch doesn’t succeed this time, that’s totally fine. Continue executing on the plan for your business. You will have other chances to pitch investors, just like there are always more prospective customers or employees available. You might even close funding from the same investor!

Don’t give up. This will not be the hardest moment in your company’s life; dust yourself off and try again. Improve yourself, your company, and your pitch for the next opportunity.