Learning how to pitch VCs is critical for most tech founders (though, maybe it shouldn’t be). Pitching is a learned skil and you can get better at it. First, understand that raising money is a sales process. Once you know that, the below suggestions on preparation and understanding your story well can help you nail the delivery of your pitch. With those things in place, you'll rapidly get better as you gain experience by doing actual pitches.

Here are the key elements to remember

  1. Craft a simple story that convinces people that your company matters.
  2. Prepare well for Q&A. Understand the questions that smart and interested people are likely to ask about your business to learn more.
  3. Prepare supporting material well.

Craft a simple story

Good pitch decks are like children’s books. They have 10-20 pages. They never put more than one concept on a page. That concept is explained with one simple declarative sentence and supporting evidence on that page illustrates the point and tries to convince the reader that it’s true.

For example:

  • We are the fastest growing company in our industry
  • {Graph comparing growth rates with competitors}

When you remove the supporting evidence, you should be left with a string of simple, declarative statements. When read in order, these statements should tell a clear and compelling story about why your company is important. 

For example:

  • We are the Gates Foundation. We find ways to use philanthropy to solve critical problems that are hard for markets or governments to address. Billions of people face some crucial challenges related to health and education. We’ve figured out how to very effectively deploy money to help reduce and solve those problems. We have learned three things that are critical to deploying money effectively. We have unique access to attention, governments, capital, and talent — allowing us to continue deploying money effectively for years to come. Our operations are working globally and we continue to expand. We intend to spend 50 billion dollars over the next 25 years. We expect this to save a total of 67 million lives and help raise 600 million people out of poverty. To date, we’ve been heavily focused on healthcare and education, but we think we can also apply our approach to solving additional challenges.

Those sentences all link together to tell a simple and compelling story. It’s ten sentences long and when you read it, it’s clear what the underlying story is and why the Gates Foundation matters. Imagine that each of those sentences is the headline of a slide in a deck and that each slide has supporting evidence that proves the point made in the headline. That is the type of deck you should try to build. If you gave me that presentation, with supporting evidence that clearly proved each of those ten sentences, I’d be a massive Gates Foundation cheerleader.

If you want to build a good pitch deck, pretend you’re creating a children’s book about why your company will win.

Prepare well for Q&A

Your pitch is built to excite an investor. It gets them interested. It's the first step of a longer process. For an investor to go from interested to excited, they will generally need to learn a lot more about you and about the business. If an investor can ask, and get a solid answer to, a smart question — that moves them forward and helps them make a decision.

Some questions aren’t smart. They don’t invite answers that shed much light on the company’s strategy or its potential for success. They don’t help identify or understand risks. They don’t do much other than build rapport and allow you to look confident. Answering those questions is time that's being wasted (confidently answering a bad question isn't a negative, but it usually doesn’t help you get the other person build conviction in you or your company). 

There are likely 10-15 truly good questions that could be asked about your business right now. When investors ask you a good question, you should rejoice — that’s a sign they understand the business, are engaged, and are smart. It’s also your chance to truly sell them.

Most people don’t spend enough effort getting this right. You should know the good questions that help explain your business. What nuances are important? If you failed tomorrow and were asked to evaluate investing in a similar business, what would you ask? What risks do you face? If you fail, what are the most likely causes? 

Spend the time to brainstorm all of the good questions you could get, both the ones you’re excited to expand on and the difficult questions that you hope you don’t have to answer. Don’t waste time on bad questions. “What’s your hiring plan over the next 12 months” is a bad question. The good forms of that question might be “what’s missing from your team today and can you add that with this round” or “how will you build and manage a great team?”

Brainstorm good questions and then answer them as truthfully and compellingly as you can. Write the questions in a doc and write the answers. Take the time to think through them well. You’re investing your time and life here, don’t shy away from asking the hard questions of yourself. Risk isn't bad — but you should know the risk your taking.

Many people don’t put in the work on this. Don’t be one of those people. Your answers to good questions are your opportunity to show that you know the business, that you are smart, and that you have good instincts. Refine your answers. Get to the point where your answers directly and succintly address what matters about that question. 

For example:

  • Q: Why don’t you give more in the United States?
  • A: Our foundation spends about $500 million a year in the United States, most of it on education. That’s a lot, but it is less than the roughly $4 billion we spend to help developing countries. We don’t compare different people’s suffering. All suffering is a terrible tragedy. We do, however, assess our ability to help prevent different kinds of suffering. When we studied the global health landscape, we realized that our resources could have a disproportionate impact. We knew we could help save literally millions of lives. So that’s what we’ve tried to do.
  • Source: The 10 toughest questions we get asked (2018 Gates Letter)

In keeping with our Gates examples, this is a good example of thinking deeply about hard questions and coming up with an answer that is clear and compelling.

Not everyone will ask good questions. That’s okay. The people you're pitching are constantly context-switching and many of them won't understand your business yet. Your job is to navigate them to the good question, which can be done a surprisingly high amount of the time, and then answer it.

For example, if someone asks the bad question: “what’s your hiring plan in the next 12 months?” Then you can answer their question briefly, then redirect and connect it back to a good question that you have an answer for. 

For Example:

  • Direct answer: In the next 12 months, we’re planning to hire mostly in engineering so we can get our product out the door and meet the milestones that our current design partners X and Y are excited about.
  • Pivot to answering “good” question: When I think about growing the team, I think that long-term, our biggest gap is finding a really critical person who can own risk and compliance. That's hard for us because this person needs to be credible to Fortune 500 CIOs, but has to be an excellent startup operator. I’d like to bring that person on board as soon as I can find the right person. I have been meeting with 2-3 exited fintech founders each month to find out how they managed risk and compliance and to identify people from those teams who might fit this profile.

Prepare supporting material well

I’m going to spend a lot less time on this, because it’s a lot more company and stage dependent than what you see above. 

Are you a seed stage founder? Financial model might not matter that much, but employee and customer interviews might. If you’re Series C, you’re going to have your financials split out 6 different ways and showing aggregate data on customer behavior is probably more important than specific customer reviews.

Here’s what’s important to know. Once a good investor goes from interested to excited, they start becoming advocates for the deal, but they also switch from thinking “what could this be” into thinking “what are the ways this is going to bite me.” Welcome to diligence. Your strongest advocates will be the people that go through this process and reach conviction about the decisions they are making. Someone who's easily convinced that what you're doing is right is usually easily swayed the other way if challenged by detractors. Going through this process and helping people build real conviction by answering hard questions is a critical phase to getting someone to say yes and work with you over the long-term.

Spend time thinking about what investors might need in this phase. Ask friends. Ask VCs. Ask your investors. If there are clear things that are likely to be common needs, set those up ahead of time. Get some customers that are willing to do interviews. Get personal references perpared for your key team members. Build your financial model. Get your cap table exported. Whatever it is, try to avoid being surprised by a “can you send us the…” and having to race to build something in a few hours.

It's perfectly fine to gate some of this information to an apporpriate time during the process. If you only have a few customers willing to talk to potential investors, make customer reference calls the last part of diligence after an investor is clearly excited about your business so that you don't have to make a customer doing you a favor talk to 20 different VCs. But be responsive to reasonable asks here. It can feel like the investor is skeptical of your conclusions or asking you for busy work — but you want to work with people who get to real conviction. They will be better long-term partners and they will be stronger advocates for you when the rest of the firm is trying to decide whether to give you a term sheet or not.

There's a lot more that can be said about the fundraising process. If you have specific questions, ask me on twitter or read Texts With Founders for more. But, approaching your fundraise like a sales process and doing the prep listed above will put you in a better position than 95% of founders.

Note: No amount of prep can make up for having unrealistic expectations. If you want to make your fundraising process as easy as it can be, the best thing you can do is need fundraising less and raise the round behind you

This doc is a work in progress. Suggestions or ideas welcome.