Looking to polish your pitching skills? Advance member, Elias Bizannes, shares his top five tips to pitch effectively to potential partners and funders in Silicon Valley.
Understand your audience:There are different types of people in Silicon Valley that want to hear different things, and you need to tailor your communications for your audience. Think of VCs as professional investment managers; you need to show how you can get a return for them.
It’s very different from targeting a designer as an employee who’s motivated not necessarily by money, but to things that are going to have impact and are going to showcase their creativity. If you can try and have a deeper understanding of who you are targeting, you can tailor your communications that way.
Be prepared to understand Australians are terrible at communicating in the US market: Australians tend to build rapport or have a joke with each other. We can fluff around for 30 minutes before we actually get to the point. Americans are very efficient, so you need to make sure that when you first interact with people they can immediately deduce what you’re doing, how they can benefit from you and what you need from them. If you can answer these three questions within the first few minutes of talking to someone, they can immediately make an assessment and give you the necessary feedback that you need.
People underestimate the importance of the vision of the business: A lot of people tend to focus on throwing out numbers, getting excited about the technology or the solution they are building. Very few people seem to really clarify the big vision. The reason this matters for venture capital goes back to the first point – that VCs are trying to make money themselves. The vision matters from a VC point of view because what you are doing is painting a vision – of the best case scenario and what you could achieve if you are able to execute perfectly. I’ve seen a lot of CEOs and founders of companies who have raised a million dollars in seed funding, but have been rejected from my firm for that reason.
Communicating traction: You can have a great vision and you can have a great product, but if you haven’t actually got a product market fit or any evidence suggesting that you’ve got some product market fit, a lot of people are going to start feeling uneasy about what you’re doing. The way you raise money; for example, is to communicate your vision, but to also show you’re not a risky investment, by proving that all parts of your process are controlled.
Traction is people actually wanting to use your product or buy your product. It is that people are willing to give up cash to use something that you’ve built and it shows that you’ve got some element of product market fit. Truly understanding what traction is, and making sure you have a set of data points that validate these hypotheses, is important.
The most important number you can share with someone is your growth: You could have 1,000 people using your product everyday but if you still have 1,000 people using your product a year from now, that doesn’t excite the VCs and that doesn’t show you’re really growing as a business. Silicon Valley is about growing scalable high growth businesses and you want to be able to prove that you are on this continuum where you are getting some traction and that people are using your product. You want to be able to show people that you are just about to take off, and that you are on a point in the curve where you can expect exponential growth.
About the Author
Elias Bizannes is a director at venture capital firm Charles River Ventures, based in San Francisco. He is also a scout for Angel List, co-founder of the Data Portability Project and instigator of the StartupBus and StartupHouse. Elias has been living in San Francisco for over two and a half years, and in his spare time develops programs to support entrepreneurs and startups from Australia.