What are investors really looking for? Your guide to the pitching process

Key Takeaways

• Sell yourself. Show the VCs you have a unique approach to addressing a real problem and you have the right team to make it happen.
• Be ready to explain how you’ll use their money to reach key milestones and show you understand the market.
• Strengthen your deck by sharing it with trusted advisors for honest feedback, then address it ahead of your pitch.

You have a brilliant idea for a startup, a solid business plan, and maybe even a prototype –– that’s a great start. But is it enough to turn heads, never mind convince someone to invest in you?

Venture capitalists (VCs) see hundreds of pitches every year, so you have to make sure yours will stand out. Understand what investors are really looking for and prepare for their tricky questions.

VCs are actually investing in YOU

Bring co-founders who will complement each other. Not only does this make for a better presentation, but it’s a great way to show investors a solid yet dynamic relationship. They’ll be looking for this.

Be ready to talk about your team’s expertise. Specifically in management, technology, product, sales and marketing. If there are knowledge and skill gaps, you must have a plan to show how you will fill them.

How you react to questions, especially the difficult ones, will also come under scrutiny. Poise, composure and honesty are essential, no matter how challenging the questions are. If you need to, take a breath before answering.

Investors will try to poke holes in your pitch. Examine your strengths and weaknesses and try to see things from their point of view to help deliver a smooth answer.

Pitch questions VCs will definitely ask

Although your pitch may be the big moment for your startup, for VCs, it’s just another day at the office. You’ve got to make it clear why they should invest in your company over all the other opportunities.

To answer this, in some shape or form, VCs will press you on these key areas:

• What problem is your company solving?
• What is unique about your product or service?
• How large is the market for it?
• What is the competitive landscape and how is it evolving?
• What are the revenue and growth models?
• Can your team pull it off?

Download a full list of questions that VCs may ask.

To prepare for this, send your deck to a group of trusted advisors a few weeks beforehand. Ask for real, constructive and honest feedback. It might be tough to hear, but these insights are gold and will pay off when it comes to the pitch meeting.

Pitch questions that will really make you think

Of course, investors will put money into your startup in the hope of scoring a big return. This is an important consideration.

VCs will want to know which milestones, particularly those related to growth and revenue, you will hit and when. If you have no immediate plan for revenue, maybe because product development will take time, list other benchmarks you will achieve instead.

It can be difficult to answer process-based questions that don’t have ‘correct’ answers. Things like hiring and marketing plans are always subject to opinions.

And finally,

Questions to critically think about and answer honestly:

• How do you plan to use the money?
• How far will the capital take you?
• Which milestones will you hit and when?
• Where do you see this business in five years?
• What are you looking for in an investor?
• Who is your real competition?
• Who absolutely needs to have your product?

Takeaway: put yourself in a VC’s shoes

The best way to prepare for any pitch meeting is to consider the VC’s point of view. If you were looking to invest, what would you want to know?

Go into your pitch with confidence in your team and idea. Make sure you share the 8 - 10 most important points and tackle questions with integrity. At the end of the day, it’s a sales process and you are selling yourself.