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This post is an excerpt from the ARtillry Intelligence Briefing, Smart Money: Insights from AR & VR Investors. It pulls from the section of the report that examines tactics for pitching VCs.
The Art of the Pitch
Beyond opportune entry points and building blocks in AR and VR, there is an equally important set of tactics for pitching VCs. What do they want to hear, and not hear? These questions could fill their own report, but we’ve collected a few high-level tactics on a practical note.
Before pitching begins, investors we talked to advise to choose investment firms wisely. Make sure there’s alignment in sector focus and investment stage. View investment firms’ portfolios for these signals, and to make sure there aren’t conflicting/competing investments they’ve already made.
“Do your homework,” said Comcast Ventures’ Michael Yang. “Have they already invested in AR or VR? If they haven’t, you’ve got a tall bar to clear. If they have, then you can see at what round and at what stage they usually join, and you can get a road map for what their appetite is.”
Then it’s time to secure a meeting. Here it’s important not to cold call. As Marc Andreessen has said many times, a true test of an entrepreneur’s resourcefulness and salesmanship is if he or she can network their way to him. It tests an entrepreneur’s value, before the pitching has even begun.
“VCs will tell their limited partners how they have this great deal flow based on relationships,” said Loup Ventures partner Gene Munster at AWE. “Which means that a cold call coming in, even if it’s a phenomenal idea, [is] probably going to be viewed skeptically… Find a way to network into the VC.”
Next, one of the predominant points of advice we’ve heard from investors is to respect their time and penchant for brevity. This is a challenge, but the best pitches will hit all of the right points of valuation in a cohesive narrative – market size, unique value, defensibility – but will do so quickly.
“There are a few things that typically get missed. One is attention to brevity,” added Munster. “The respect for time and the clarity we hear from entrepreneurs that know how to effectively communicate and answer questions is a great value to a VC.”
Canvas Ventures’ Ben Narasin agrees and adds that it’s not just about brevity, but telling the right story. Refrain from long build ups about general tech transformation, or cute metaphors (e.g. slide graphics of ape-to-man evolution). Get right to the specific points of differentiation.
“One classic mistake from first-time entrepreneurs is long narratives to get to the point. Nobody cares,” said Narasin at AWE. “What are you doing? Who are you? Why are you qualified to do it? Why is it a big market? You’ve got to get that point across and you’ve got to be able to do it quickly.”
Lastly, a turnoff for investors is entrepreneurs who appear stubborn to new ideas or pushback on their talking points. This is a red flag because one of the desired qualities in entrepreneurs is coachability. Raw talent, experience and focus are good, but they need to be balanced with a dash of humility.
“You have to have a big vision, huge passion and laser focus on what you’re building,” said Lenovo’s Joe Mikail. “But you also have to be coachable… and admit there are things that you don’t know, and there are things that you might have to go out and get, such as senior talent.”
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Disclosure: ARtillry has no financial stake in the companies mentioned in this post, nor received payment for its production. Disclosure and ethics policy can be seen here.
Header Image Credit: Home Box Office, Inc.