How to pitch to VCs and angel investors as a tech startup. 11 tips from founders

How hard can it be to talk strangers into giving you thousands of dollars, right? Emerline looks at pitching experiences of 4 very different startup founders. And finds out exactly how.

Pitching to investors is just like dating but you only get access to their LinkedIn profile whereas they get to see you naked and your bank balance. All the mind games still apply. You need to play hard to get to make yourself more desirable and you can't seem desperate. You will meet lots of people and it is easy to get distracted with investment offers that aren't right but you have to stay strong and wait for 'the one'.

Elyse Daniels, CEO of ExodusWear

I believe that tech startup founders are extremely brave people. All they have is an idea and the passion to work on it. That’s all. And while some of them try to bootstrap their ventures the majority have to seek VC funding fairly early into the startup life in order to start a business.

And startups are fragile. They require a lot of time, money, and love to lift off. So let’s talk about how to convince investors to believe in your dream (and your team!) and what’s more important – to give money to finance your dream.

Emerline talked to 4 seasoned startup owners to find out what they learned and how their experience can help you succeed during your own pitching. We’ve asked each of them to share both their glorious victories and utter defeats.

No place for middlemen

Jay Turnbull, CTO of the company, describes Rentwolf as a transparent marketplace. The platform connects landlords and tenants excluding real estate agents. Rentwolf supports listing property, paying rent, and resolving maintenance issues.

1. Know what you have to say and learn it by heart

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Chris Martino, our CEO, and I pitch on stage together. We did that about 6 times over the course of January and February 2017.

A few of our presentations took place in Queensland. The thing is – Chris is located in Sydney and I’m based in Melbourne. We made a huge mistake of not scripting our presentation until we arrived in town. So we had around 6 hours to build something from scratch. It was the first time we were speaking together before an audience.

We had a presentation deck and individually knew what we wanted to say. The problem was, we hadn’t prepared together and it showed. Those first three presentations were the worst we did and we knew it.

After that we had a weekend before our 4th presentation in Sydney. This time we refined our pitch and focused more on the story of what our product is and our sales proposition.

Doing our homework paid off massively. During our 4th presentation there were a couple of other speakers to go on after us but as soon as we got off stage we were flooded by people rushing from their seats asking us questions about how they could invest.

It was purely because we restructured the way we spoke about our company and focused on the problems we were trying to solve, our solutions and our value proposition.

2. Rehearse your pitch in a public place, not at home

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Chris and I practised our presentation in public places together – mostly in a cafe or in a mall. One benefit of that is that you have a lot of distractions going on. We did look a little ridiculous because the two of us were saying the same thing over and over.

I recall one time we were in a cafe. The staff has heard the name Rentwolf enough times that I was worried they would ask us to leave. But it allowed us to get used to things that could make us uncomfortable and prevented us from freezing on stage. This simple method made presenting a lot easier.

One man’s trash is another man’s startup

Waster is a waste recycling startup based in Australia and New Zealand. The company offers low cost waste collection and recycling services to small and medium businesses using a 1-month subscription model. It’s primarily Internet-based with all sales done online. Waster uses an Uber-like app to communicate with the customers.

Aodhan MacCathmhaoil, CEO and founder, has recently successfully completed a funding round. He has been quite lucky. You hear stories of people pitching hundreds of times without getting success. Aodhan? He pitched twice. Here’s his advice.

3. Prepare before you pitch

We didn’t start pitching until we were up and running. We’ve bootstrapped the startup for as long as we could. We only pitched after about a year in. We launched, we picked up customers.

What we feel really helped was having sales already – knowing our customers well and seeking funding to scale a business model that was beyond proof of concept stage. When we showed that we already had sales – we could see the investors pay more attention.

4. Get a recommendation

The first difference about Waster was who we were pitching to. We have been introduced to an investor group by business people I have worked in the past. So it was certainly a warm approach. That helped us set up a meeting.

We’ve sought for the opportunities to pitch Waster previously but we hadn’t any replies. We’ve reached out to VC funds but didn’t get anything. So saying that we’ve met only two is correct but that doesn’t take into account how many investors we’ve approached. This is why having a warm introduction definitely helps.

5. Prove your business model beforehand

We had a lot of numbers to show for our success. We could demonstrate that the business is profitable, that we were gaining leads from even small investment in advertising and marketing. Our team crafted a promising business case. The question was – if we were seen by a hundred times as many people, would we sell a hundred times more products?

We didn’t need capital to prove our business model, we needed it to scale a business that worked and made money. It’s a much less risky proposition if you have already set up a working company.

6. Don't pitch alone

It’s good when there’s more than one person representing your company at a meeting. I think it gives more stability and a better impression of the business. They start to look at you as a team. It makes them more confident, gives stability and assurance.

No one person has all the expertise required – you hear all the time that it’s better to invest not in the ideas but in the people themselves. Try to show that you have a high quality team. This gives the investors faith in your business.

Custom jackets for high school fashionistas

Elyse Daniels, CEO and founder of ExodusWear, still thinks of her company as a startup even though they’ve been in the business for nearly 9 years now. ExodusWear manufactures custom jackets for Australian high school students, dance schools, and dancing clubs.

Elyse is a sole founder. She bootstrapped the company and only started to look for investors 18 months ago. Here’s her advice and her experience with them.

7. Don’t settle for anyone but the best

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It quickly became clear to me that there are a lot of synergy in trying to find an investor versus finding a husband. When you are dating and you are looking for someone who’s husband material you tend to have a bit of a checklist in terms of what you want.

I had my "investor material" checklist as well. I didn’t want to “date” just anyone. I’ve spoken to a lot of different investors but for me it was not seeking capital only. After more than 9 years in business we were looking for a strategic partner instead of someone with money. And so I was very specific in my requirements of who I wanted to speak with.

One day I stumbled upon an industry newsletter with an information about an investment opportunity. I registered my interest and then I was contacted by the company. I started talking to them. Because I really hadn’t my investment mind set on I went unprepared. I didn’t even have a pitch deck.

The experience was really interesting. Prior to that I didn’t really know much about investment. To be honest, I didn’t know what a venture capital company was 18 months ago. And it’s because I’ve bootstrapped my business. I’ve started with a $6,000 starter fund from my parents. In terms of investment that’s the only thing that I knew.

Since it took us 8 months to discuss this opportunity, we decided against going with that strategic partner. Even though I failed I learned a lot. Don’t settle for just anyone. Look for the tech partner you really need.

REIZE and shine!

Steven MacDonald is a director and a co-founder of REIZE, an Australian-based international direct-to-consumer ecommerce startup. The company claims that REIZE is the world’s most versatile powdered energy drink on the market.

REIZE team decided to use a subscription model and offers monthly delivery of energy drinks similar to the Dollar Shave Club.

8. Look for people who can help you improve

Preparing for our first few pitches at REIZE we used the services of a company that specializes in consulting startup founders. They built a professional pitch deck for us. After their revision the quality of our pitch increased tenfold.

These kind of companies will ask you essentially the same questions investors ask startups during pitches. So that when you actually stand up to pitch you will already know the answers to the most common questions.

9. Tell the truth. Don’t be a yes man

Be careful not to give the answers that investors are looking for. Sometimes when you are pitching you know what the investor wants you to say, you know what looks best for your business. But resist the temptation to be a yes man.

Investors are smart. They understand business. They’ll ask questions and eventually find out that you want to paint a rosy picture of your startup.

Tell the truth. If something is not going well be 100% honest about it. Reveal the bad metric and explain to the investor how you are going to solve the problem. They understand that young businesses have a lot of challenges. If you tell the truth right away they’ll trust you, they’ll see that you understand business and how to deal with problems.

10. Don’t make your presentation too long

Investors see a LOT of pitch decks. Try to get your message across in as little number of slides as possible. Just don’t skip on important information for the sake of having exactly 10, 12, or 20 slides. 

11. Don’t pitch too early

If the business hasn’t grown enough yet maybe you are pitching too early. You don’t understand the problems you are going to experience.

And if you are pitching too early to an investor where you don’t fully understand the problems or don’t know all the answers then that looks bad – you don’t understand your business. And the investor will not be able to trust you because of this.

And even though you may in the future develop your business further and understand it better it’s too late – you’ve already burnt that investor for good. 

Secret bonus tip from Emerline: Get to the gist of it fast

It’s hard to be interesting and original when you present your business idea among dozens of other people. So try to get to the most interesting points as fast as possible. This will capture investor’s interest and keep them engaged throughout the presentation. A decent pitch deck can help with that a lot.

The art of persuasion

Our last expert is a fictional character from a kid’s cartoon. But I have to say his advice is pure gold:

Sucking at something is the first step to becoming sorta good at something.

Jake the Dog

I actually heard this one in many variations from all of the startup founders we’ve interviewed. Practice makes perfect. Practice is king.

Do the thing and you will eventually become sorta good at it. So go out there. And good luck.

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