Last month, in the first post of my VC Explained series, I shared how early stage investors find companies to talk to. But now you’ve got a meeting set up with an investor! How do you actually keep their attention and get them to dig into what you’re building? Here’s an important secret — always remember that a meeting with a VC is a sales meeting, and at the earliest stages, the thing you’re selling isn’t your product — it’s yourself.
Let me back up. When I get on an initial call with a startup founder, after I introduce myself and the fund, there are essentially four questions I ask that I want to have answers to by the end of the meeting. Those questions are:
- Who are you — and why are you the right person for this?
- What is the problem you’re solving?
- What is the solution you’re building, and why is it the right one?
- How much progress have you made, and how quickly?
Every other question I ask on the call is a way of getting to an answer to one of those four questions.
So what makes a good answer to those questions? I’ll get to each question individually, but to start, the theme across all of these answers is to be passionate, clear, concise, and an expert in what you’re talking about. This is your baby — the thing you’re pouring all of your energy into — and your pitch should reflect that. I don’t mean shout at me like you're in a car dealership commercial. I mean show me that you know what you’re doing, that you’ve spent a lot of time thinking about these questions and that you’ve explained them to other people (who don’t have to be investors, just smart and curious!).
Also, and this is a big one, a call with a VC is best when it’s natural. Have a pitch deck, but use it as support — don’t read off of it. Assume that I’ll interrupt you with questions — because I will. You need to be ready to jump around the story depending on where my questions lead you.
I know it might be stressful to talk to an investor early on, but the best conversations are ones where you’re talking to me about your idea the way you talk to your friends about your idea (but possibly with a few more probing questions).
Now, as far as those questions — what am I actually listening for?
Who are you?
It can be a big question, and truly, sometimes the right answer is to start from the very beginning. At the earliest stages of investing this is the most important question, so it’s essential to have a compelling story.
The right place to start is genuinely wherever the beginning of your journey to the problem started. I want to know when you first realized this was a problem, the personal or career steps it took to get there, and why this is your passion. Ideally, I’ll hear that you’re an expert in the space, have deep experience with the problem yourself and have solved problems similar to it before — but I understand that many founders might not have all of that.
I also want to know who else is on your team, how you met them, how long you’ve been working together (because I want to know if you can resolve conflict together), and how you complement each other. Essentially, I want to hear a story about who you are and who your company is — and that should easily transition to the next question.
What's the problem you’re solving?
It’s important that by the end of a conversation with a VC we know that what you’re working on is truly a big pain point for your customers — and that there are a lot of potential customers with that pain point.
I need to be able to understand what the problem is well enough so that I can explain it to someone else. What that means is that you need to explain the problem to me like I am what I am — a smart, curious person who likely knows very little about the industry or problem that you’re working on. Start fairly high level, and leverage my questions to go deeper and deeper into the technical issues that you’re working on. Be able to explain how different people and roles fit into the infrastructure, and how they would interact with the problem that you’re solving.
However, be focused!
Many problems link to other problems, which link to other ones. I want to know you’re working on something specific enough to actually start solving soon. If you want to cure world hunger, great! But that’s something that will be solved incrementally — and so know how to be more specific about the piece of the world hunger problem you’re working on.
After the problem, the solution
Should naturally fit into the story.
The present vision for the product should specifically address the problem you’re solving first, with a future vision that branches out into related pieces of the puzzle. I should understand how the different stakeholders might interact with your product and how it fixes each of their issues.
Unless the differentiation is deeply technical, I care less about the technical aspects and more about the user experience. Unless there’s a real need for deep AI or blockchain to solve the problem, don’t tell me that you’re working on it. Keep the pitch laser focused on which pieces of the product solve which pieces of the problem for your customers.
And speaking of customers...
It’s OK if you don’t have any yet!
I’m a pre-seed/seed stage investor, and so I don't expect you to have millions in revenue with a lot of high profile customers. What I do want to know is how long you’ve been working on this and the progress you made. You built an MVP in three months? Amazing. You have paid pilots lined up with marquee clients. Great to hear! You’ve got 1000 users, adding 20% a week because they keep telling friends? Solid virality.
Speed of progress means as much, if not more, than where you’re at from a levels perspective. Don’t be embarrassed that you’re early — that's what I expect and it doesn’t scare me away. If the rest of the pieces are in place, that’s more than enough for me to have another call.
Good luck! Remember — this is what you know better than anyone else in the world. If you keep that in mind, then you can be confident that you’re ready.
This blog post is part of Allison Weil's VC Explained blog series:
How venture capital works can be opaque, particularly for the many people who don’t have a lot of previous exposure to the space. In this series, Allison Weil is breaking it down from the very basics — from how VC’s like ours find companies, what we look for and how to get us excited, the economics of early stage investing and more. If you’re a startup founder, aspiring investor or just someone who wants to understand more about VC, this series is for you.