This article was originally posted here on June 25, 2018.
If you are making the right moves as a founder raising capital, you’ll eventually get the call to join a venture firm’s Monday morning pitch meeting. It’s in this setting, where years of startup hustle will boil down to an hour or so of presentation and conversation. At this year’s inaugural Pre-Seed Summit, hosted by Afore Capital, we brought together some of the leading voices in venture. Here are a few of their reflections for entrepreneurs on how to conquer the Monday morning pitch meeting.
Avoid being starstruck
Big venture capital firms can be stacked with superstar players. Investors who have major startup success stories in their rearview mirrors. All of that experience can give founders the jitters. Alfred Lin, Partner at Sequoia Capital, previously COO/CFO at Zappos, recalls a time when his management team at Zappos came to him concerned about pitching an idea to famed VC Michael Moritz. Alfred said, “Mike is a very good board member. He adds a lot of value. But he comes to the board meetings once a quarter. So let’s just say he shows up to Zappos 1 day out of 90 days, but since he is a good board member, he works on Zappos 3 to 5 full days out of 90 days. And yes, he is 3x smarter than you. So he thinks about the company 15 days out of your 90 days. You still win.” So get your head in the right space, and walk into your partner meeting with the confidence that even a superstar isn’t going to know the ins and outs of your business as well as you are.
Bonus tip… Watch out for your body language too. VCs are keenly aware of how you present physically as well as verbally. We wrote about these subtle cues in 6 Unspoken Lessons for Raising Your Series A.
Don’t be rattled by the questions
One of the most nerve-racking factors for a founder in the hours leading up to a partner meeting is a preoccupation with the questions they’ll be asked. This worry is misplaced. Alex Taussig, Partner at Lightspeed Venture Partners, recently had a conversation with a concerned founder. Alex told him, “We’re bringing you in to present because we believe. We’re on your side, and we want you to do well. If we ask a lot of hard questions, it’s to better understand the opportunity ourselves.” Hard questions will come and founders will get things wrong, but it’s important to roll with it. He said, “You have to accept that some questions are unanswerable at that moment in time. We don’t have a crystal ball, and neither do you. But hearing you think through contingencies helps us process all the directions this business can go in, and ultimately decide if there’s a scenario in which a massive outcome is possible.” So, accept the reality of the conversation and focus on the optimistic outlook these investors are already predisposed to.
If you’re not prepared, it’s too late
You shouldn’t run a marathon the same day you decide to become a runner. It wouldn’t make sense and you wouldn’t have the stamina, strength, and focus to get to the finish line. That same mindset can be applied to startup founders. By the time race day comes around, you should be as ready as you’ll ever be, because you’ve spent months preparing your body and your mind for this moment. Alfred Lin said, “We should not know the business better than you. If we know the business better than you, it’s probably not a good situation.” Founders are obviously going to come prepared because they live and breathe their business. If that isn’t the case, it’s probably time to rethink your startup.
Less sales pitch, more intellectual debate
We’ve heard from many VCs about the importance of thoughtfulness in Monday morning pitch meetings. It’s less about being right and more about having a meaningful conversation. So ditch your salesperson persona and instead come in with a deep understanding of your business and a bias towards open, connected dialogue. Jenny Lefcourt, Partner at Freestyle Capital described the mixture of tenacity and receptiveness needed. She said, “That balance is you. That balance is you knowing your space, being thoughtful, having conviction, but being very open-minded and wanting to learn from the experience of this session. We look for founders who are as interested in getting the feedback as they are in convincing you.”
Seeking businesses not product features
It’s great to have killer features, but that does not necessarily make a unicorn. An off-the-charts market opportunity, business strategy, and leadership team is what can do that. Alfred Lin put it this way, “At the end of the day we’re looking for great founders who are attacking a big problem, in a big market, that eventually will be a substantial company. The investing mistakes we (as VCs) make are the company ended up making a feature and not a product, or a product and not a business, or a business but not a great product.” It’s about all the dimensions of a business, the entire package. So make sure, as an entrepreneur, your priority is on the big picture.
Knowledge of your business comes in many forms
As we highlighted earlier, deep understanding and openness to healthy debate are all qualities that VCs are looking for during partner meetings. They are expecting an in-depth give-and-take. Remember that being well-versed in your company is not a one size fits all mentality. At our Pre-Seed Summit, Alfred Lin spoke about these different dimensions. That there are many kinds of entrepreneurs — some who are keenly aware of every single metric of the business and those who are laser-focused on product and user experience. These areas represent all different types of thoughtfulness and are all valid. He said, “That’s what we are probing for. And when we see those qualities, we tend to believe there is something special there.”
We hope these words of wisdom help pull the curtain back on what can be a stressful black box of a situation. It’s your knowledge and thoughtfulness in how you approach your startup opportunity that might make you a VC’s next great investment.
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