Mark Rampolla shares what venture capitalists want to hear in an initial pitch from entrepreneurs. Rampolla is the co-founder of Powerplant Ventures, a VC firm that invests in food and beverage startups.
During his work at the venture capital firm Powerplant Ventures, he has heard a lot of pitches from startuppers. As you could imagine “First impressions are critical”. How you say and what you say it in the first five or 10 minutes of an initial meeting will likely determine if investors even bother to evaluate your company ’s potential. For sure there are no magic words that will automatically get VC to invest. In this article, you would find some phrases VC love to hear during a pitch.
1. “How much time do you have, and how would you like us to use it?”.
2. “Here’s why my company’s product or service is personally important to me.” Investors invest in you just as much as they invest in your business model.
3. “We’ve worked together for years and have always wanted to start a company like this.” Teams outperform individuals, and teams that have worked well together before outperform everyone else.
4. “I don’t know. Let me look into that and get back to you.” It is okay if you don’t know the answers to a question, investors prefer that you’re honest.
5. “We’ve been working on this problem for years. We finally figured it out.” It shows you’ve done your research and are committed to the company.
6. “We feel like we have the right strategy, but we’re still testing, learning and are open to input.” Investors want to know you’re fundamentally curious and open to trying new strategies because we are all still learning.
7. “Here’s what our team looks like today, but we know we need to beef up X. The next three hires we plan to make are A, B, and C.” It shows you mark any current gaps in your team, and have a strategy for filling them once you receive funding.
8. “We’ve spent a lot of time with our customers in order to understand where they’re coming from.” VC like to know that you’ve put yourself in their shoes and you are asking questions “why are they unsatisfied with the available options? What problem are you trying to solve for them?”.
9. “At a monthly revenue of X, we should be able to break even. We believe we can get there in 24 months, but if it takes us an extra year we will still have Y in cash. With a burn rate of Z, we can get through another year before we need to raise another fund.”
10. “We were able to double revenue last year with little in additional distribution. We know that’s easy on a small scale, so we want to make sure we’re setting a foundation for long-term growth.”
11. “Our main competitors are A, B, and C. These guys are tough and have done an excellent job at X, Y, and Z, but here’s how we think we’re different. We’re focused on learning if that’s true, and if it matters to consumers.”
12. “One of the biggest problems we’re having is…” The capacity to bring up potential problems is a gain.
13. “Beyond capital, here’s what we’re looking for in an investor….” There’s no perfect answer to this, but it facilitates investors determine whether their firm is a good fit.
14. “We understand that as VCs you need to deliver a return, and we believe there is an opportunity to sell to A, B, or C down the line. However, we are focused on building a great company that can stand alone. We believe this gives us options if the right exit is not there.”