The Top 10 Mistakes Entrepreneurs Make In Their First (Virtual) VC Pitch Meeting
You have finally secured a pitch meeting with a VC. The well planned strategy you spent months crafting has worked and you avoided the common mistakes entrepreneurs make when approaching investors.
This is your chance to secure funding to build out your dream. You feel a mixture of excitement and nerves. You want to prepare and do your absolute best.
There is no blueprint for success. As with any other relationships in life, there needs to be the right chemistry and mutual interest to move forward.
That said, avoiding these top 10 mistakes will increase your chances of getting investors to meaningfully engage, which is the critical first step.
- Going in mob handed. Showing up with your whole team was never a good idea. It raises immediate questions. Why can the CEO not handle this themselves (they should be able to) and do they really have so little to do building their business that they can spare the time (they should not be able to). Investors are obsessed with efficiency. Seeing the CTO or other founders sit in an initial investor meeting twiddling their thumbs just in case they get asked a question is grossly inefficient. They will be involved in the process later on. Having just the CEO attend has an added benefit using video calls – it creates a far more direct, personal interaction with the investor when they see your full face on their laptop screen and vice versa.
- Wrong choice of tech. Do not let an esoteric choice of video calling platform frustrate the smooth running of the meeting – Zoom, Hangouts or Teams. These are the options. Try to figure out the investor’s preferred one and go with that.
- Not having a back-up plan. Jerky video. Muffled audio. Talking across each other. Tech problems happen and they are frustrating to everybody involved. They can change the whole mood of a meeting and sap energy from the room. If they persist for more than a few minutes, offer up your cell phone number and suggest a telephone call instead.
- Underselling or overselling yourself. Impostor syndrome hits us all from time to time. Do not let it be in an investor meeting. Being self-effacing and humble, qualifying successes or making unnecessary negative statements do not work in this environment. Prepare thoroughly for the meeting to build confidence and put your best self forward. Keep your energy levels high. Do not, however, let this flow over into arrogance – being overly confident and bragging is not a good quality and will be seen through.
- Not being authentic. It is important to be yourself. Acting a certain way that you think the investor wants is unlikely to work in the long run and is no fun to sustain. Remember that, yes, you are trying to secure funding, but more importantly the aim is to build a relationship that is going to be mutually beneficial for the next 5 to 10 years. Those tend to work best with mutual honesty and trust.
- Sticking too rigidly to the script. Enter meeting room. Laptop on. Connect to screen. Go! This may allow you to be in your comfort zone but putting up a presentation and running through it non-stop rarely works. This is even more the case in virtual meetings where sharing your screen reduces your face to a thumbnail and allows the investor’s thoughts to drift. The key here is maintaining engagement. Ask the investor how they would like to run the meeting and take their lead. Be prepared for a back and forth Q&A. Do not skip over your personal story – investors love to understand your ‘why’ and it adds context and life to whatever you are going to say next.
- Talking too much. We have all been at a dinner party with that person. They open their mouths and pause for breath only when coffees are being served (if you are lucky). Do not be that person. Your aim is a two-way dialogue. You want the investors to ask questions because this keeps them engaged and raises the chances that they get interested in what you are doing. Talking at them for an hour, unless you missed your real calling on Broadway, will bore them.
- Not reading the (virtual) room. Use your EQ. Monitor facial expressions. If the investor seems distracted or disinterested, change it up. Modify your tone, move onto a different topic, or ask the investor a question. Remember that your aim at all times is to keep the investor engaged. This gives you the best chance to gain their interest and excitement about what you are doing.
- Not asking the right questions. The meeting is not just an opportunity to sell your vision. You need to learn as much as you can about your potential investment partner. At the very least, ask some screening questions to figure out how much you should be prioritizing this investor. What is your process from here? How does your IC work and who is involved? How does your fund support its portfolio companies? And a Covid-19 bonus question: how many new deals have you done so far this year and how does this compare to last year?
- Not setting follow-up actions. Founders too often leave a meeting with the ball in the investor’s court to follow up in an undetermined time frame. Try and agree action points on both sides. Founders who agree to send additional materials that help the investors understand the proposition and do so quickly after the meeting stand out. Demonstrate your responsiveness. Try to agree when the VC will get back to you if you can. Having a timeline from them – and seeing whether they are early or late – is a useful benchmark on their level of interest.