Kinjal Shah, Senior Associate at Blockchain Capital, shares her talk, “How To Craft Your Pitch and Get Funded for Your Next Big Idea.” She discusses sprint versus marathon fundraising, the importance of storytelling while making your pitch, and tips on creating a successful pitch deck.
There are a couple of different approaches to fundraising. There are two approaches to fundraising with venture capitalists: the first is the sprint method, and the second is the marathon. Sprint is where you fundraise in a short period, and you treat it like a sprint. You aim to have your fundraising done within a 2-4 week cycle or whatever seems appropriate, given how much capital you're trying to raise and where you're trying to raise it from. You do this over a shorter period to create some sense of urgency behind your round when simultaneously talking to many people. It can help create a sense of FOMO. The second approach is taking more of a marathon approach. This is where you build a relationship or a couple of different relationships with investors over time and cultivate this by providing them updates, whether on your project launch or what you're building. You bring them along with you in the process before starting to raise capital. Some folks say that this leads to stronger relationships with their investors. However, this can also take much longer. Both approaches have benefits and trade-offs and are not a one-size-fits-all solution.
If you're considering raising a seed round for a project you're doing, it's essential to identify which approach you will start with. That way, you can find the right investors, identify your goals and the process you want to take, and then prepare accordingly. If you were to take the Sprint approach, preparation would include researching investors and lining up potential warm introductions. If you want to cold email them, you can line up some of the emails you want to send out and try to stack your meetings so they all fall into an exact window. When you're doing this, there is less room for error regarding your deck and pitch. Everything needs to be polished and ready to go right before you start. Marathon takes a little bit more of a work-shopping approach. You're talking to investors. You're sharing your ideas with them. You might be iterating in some ways, iterating your pitch as you go. This process can drive on a little bit. Of course, your time is valuable, so just be cognizant of how much of a marathon it is. When trying to find the right investors, do some research and homework about what types of investors you are looking for. Do you want angel investors? Do you want them to be more strategic folks who can help you with recruiting, marketing, or PR?
Storytelling is an art. I've probably sat in on maybe 100 pitches over the past two years. You start to see some patterns and trends of what's and might not be working. At the end of the day, when you walk into a pitch, there are a couple of things that investors are looking for. Make it personal. Folks sometimes think investors are looking for data and want to learn about market trends. I think the personal story is really what resonates in the room. How did you come to where you are today? Why are you building this particular product or company? How does it fit into your background, and what problems are you passionate about? Don't sacrifice emotion for data. Both are important. Exude energy. It sounds like an obvious statement. I can't stress how much body language, eye contact, and being excited about what you are building can change the mood in the room. I think the energy aspect can change the room, so I highly recommend bringing that attitude to every pitch you can.
Before entering the room, I urge you to write down 3-5 things you want to say to an investor. I've had 30-minute pitches where a founder might spend 10 minutes talking about their background and how they got to what they're doing. Land meetings with your top investor prospects later in the process so that they're a little bit later in your process, so they are not your first pitches. It can be beneficial so you've had time to smooth out any kinks. When you're in the room or Zoom with the investor, what thoughts are going through their mind? They want to know what problem you are solving.
This is, of course, the most obvious starting point. If you're building something related to the financial stack, many teams come in, and they say, we've envisioned an entirely new financial stack top to bottom. It's going to revolutionize the way that infrastructure works and payments work. It's important to have a honed-in problem you're solving and why you are the right person to go out and solve it. How big is the market? Everybody talks about market size being important and demonstrating that the market is not only big but growing. VCs are investors who are looking to make a return on their investments. Instead of simply talking about how big the market is and some growth trends, include dynamics in the market that you think are uniquely advantageous to what you are building. Why are you the right person to build this? This is a tough question. Having conviction and excitement about this being the right team is important. I know that sounds squishy, but I think it comes across between passion, demonstrated interest, background, and skill set that you bring to the table. How have you validated this idea? From an investor perspective, it's great to show rather than tell.
I have a degree in Quantitative Economics, so I'm a little bit more Math-oriented. I'm not a programmer and don't have much computer science knowledge. Given the focus on the blockchain industry, I do sit in technical pitches 99% of the time. There are a couple of things that work well for technical pitches, things that I think folks sometimes underestimate the power of. Explain it like I'm five. The investor might not be familiar with a certain language, even if they are technical, simply because they might not know the specifics of what you're building. That's when you start to lose folks in the room when using too much vocabulary that is a little bit opaque. When you keep it simple, that shows that you understand the mechanics of how it works. Then, peel back the onion and go into more specifics on the technology and how some of the incentives of the protocol work. Contextualize the tech. Use examples and cases. Talk about the competitive landscape and how your technology differs slightly from what some competitors use.
Visuals help. If you can put together some sort of diagram to explain what you're walking through, it can be helpful to focus your eyes on something as you understand and hear about the technology. Investors will probably look at your deck for less than five minutes initially. At that time, they must walk away saying, I want to learn more about this company. Optimize for the minimum amount of time needed to understand all the content. Also, allow a viewer to dive deeper into the details if they want to. Sometimes, folks think of pitch decks as more like reading decks. They're somewhere in between a presentation reading deck. There should be words on the page, and you should walk the investor through them. They should be able to come away with an understanding of what the problem is and what the product is. At the same time, if there are too many words on the page or too much complexity, you'll lose them. A trick that we used to do in my consulting days was to remove all the side content and just read the headlines. We would ensure the headlines were enough to understand what the company was doing. The main deck should be short. Use the appendix to address questions that you think might come up. I might spend five or 10 minutes on the actual upfront deck. Still, then later on, when I am preparing for our meeting or when I'm doing follow-ups afterward, I'll spend a lot more time in the appendix, particularly if there are details around the technical architecture, the technical details of what you're building, financial projections or use of funds.