Crafting the Perfect Pitch
Arjit from Marsshot.VC offers detailed insights into creating an ideal pitch how the way to a successful investment is guided by a strong Investor-Founder relationship built on trust & knowledge.
Whether it’s your first funding or the ones after that, there is an unsaid understanding of how your business pitch can either make or break this deal.
Marsshot, with a portfolio of 55+ companies, has been actively investing and advising early-stage startups. And, we have tried to sum up everything Arjit had to say about investment & pitch in just an article for your next Venture Capital (VC) call.
While VCs always stay a trending hashtag among entrepreneurial trendsetters, when should you actually look for a VC? Tough question! While the answer can widely vary, Arjit has some clear answers on when not to-
If you are just starting out & have access to an Incubator/ Govt. for grants, funds
If you are just digitizing a traditional business
If you can rely on organic growth & strong unit economics
Having said this, VCs still play an important role in creating a nurturing environment for your startup to grow and scale.
If not more, it is equally important as choosing a life partner and we advise you to consider a few parameters before pitching in front of any Investor. The below 5-stage funnel might help you in filtering out the ideal ones from the crowd because - “You shouldn’t pitch to anybody and everybody! ”
Now, coming to the most important question of this article:
“What is an ideal Pitch?”
We bet every founder has this question in their mind but we asked it loud for you! Arjit being a VC with 8+ years of experience talks about some key aspects of an ideal pitch-
Communicate your company’s purpose & mission
Highlight your team, problem statement & solution
Answer the “Why now” for your solution
Identify your market potential & competitors
Show a winning plan and successful business model
Include the financials/ traction
Set a vision for the future
Woah! A long list indeed! But if you have ever pitched before, you know it isn’t always about what’s in it. Sometimes how you do it makes a difference. Customise your pitch, have clarity about your team’s potential, and show enough data to back up your idea. Take pauses and leave enough time for questions.
If you want to impress them more, you can also prepare a detailed FAQ section at the end as we did for you here! Let us know if you’re impressed!
FAQs
How do you reach the VCs?
Warm introductions via your network
Attend offline events
Be socially active over LinkedIn, Emails, etc.
Keep in touch- Constantly communicate with potential investors
What to do after a pitch?
Do follow-ups (The sales principle tells us to follow up at least 8 times!)
Keep your investors informed and updated.
Don’t take no for an answer! Share every milestone or progress even after being rejected. This will keep them invested, and you might also get an investment.
Do VCs invest before MVP?
Yes, they do. The ticket size may be smaller and your pitch has to be the best in portraying the problem vs. solution to be able to close a VC in such an early stage.
What is the concept of “building a round”?
It is referred to as networking and bringing a group of investors together to partake in a funding process. Let’s say you are raising $500K, then you can bring in 3 potential investors where one can be a lead investor investing up to $300K, and the others can invest the remaining.
Is it essential to have a background?
The background should not necessarily be based on your educational qualification or the number of successful startups you have had. Even the failed experiences can be counted as a background, provided you can attribute all your learnings, insights, and challenge-solving skills.
Are there any age criteria Investors look at?
No. There would be a preference for years of experience in certain sectors, but age can never be a determining factor.
If a startup deals with two different sectors simultaneously, how to categorize yourself while pitching?
Your categorization should be based on what response you are expecting from the Investor, and you can customize accordingly.
How important is unit economics while evaluating the investment?
Optimised unit economics help you prepare for tougher times ahead. They are excellent indicators of how financially sound your business strategy will be over the long term.
How do you stand out in front of a VC, typically in a sector where most startups are failing?
Interesting numbers
Profitability at the unit level
Faster growth rate
Different, unique approach against competitors
A relationship with the Investor built on faith & trust
How can we value a startup at the seed, pre-seed stage?
In case your startup is at a very early stage, it is advisable to not value them, instead, go for a convertible round based on the Principle of SAFE- a financial instrument commonly used in startup financing, particularly in the early stages of a company's growth.
It provides a simplified and standard way for startups to raise capital from investors without determining the company's valuation at the time of investment.
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