The Straight Dope: VCs share tips for the perfect pitch

As six Ottawa startups prepare their pitches for AccelerateOTT in June, Techopia talked to Mistral Venture Partners’ Code Cubitt and Panache Ventures’ David Dufresne to get their dos and do-nots when pitching for early stage capital.

The problem

If VCs like Dufresne and Cubitt were teaching Pitching Your Startup 101, students walking into the classroom on day one would probably see “What’s the problem?” written in bold letters on the chalkboard.

Whether it’s a crowd of hundreds at a pitchfest or a small room of private investors, hooking your audience early with a massive problem is key to keeping their interest for the rest of the pitch. Dufresne says the problem has to be big enough that potential investors could see your solution, whatever it may be, making a difference in the day-to-day lives of customers. In every pitch, he’s looking for the 10X potential: A product or service that solves problems 10 times faster, 10 times cheaper or 10 times better.

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“We’re looking for painkillers, not vitamins. So it’s something that really impacts what someone does in their daily work,” Dufresne says.

The team

While some entrepreneurs might be tempted to throw up billion-dollar figures about total market size or some eye-popping metrics about month-to-month growth, Cubitt says VCs aren’t going to invest in numbers – they’ll invest in people.

“Metrics are a little like a GPA on a resum​é – that gets you in the door,” he says. “Better VCs look underneath the story. So it’s not just about the metrics, it’s about the team. What do they know that the rest of the world has yet to learn?”

Dufresne agrees with the people-first principle. When founders walk into his office for a first-time meeting, the first question he asks is, “What got you here?”

Entrepreneurs who have a background in their target market and have felt the very pain points they’re solving often have built-in credibility, he says, and he’s likely to keep that conversation going.

Avoid the Dragons’ Den trap

When you’ve got only a few minutes on stage, there are no free seconds to waste on irrelevant information.

Dufresne advises founders to avoid the spectacle of TV-style pitches and leave transactional details out of the slidedeck. Equity stakes are never negotiated on the pitchfest stage, he notes, so save those offers for due diligence after the fact.

“I blame things like Shark Tank and Dragons’ Den. Like they’ll say, ‘We are raising $500,000 for 15 per cent of the company.’ Like, that’s not true. The transaction hasn’t been negotiated, so leave that out,” he says.

The stage vs. the boardroom

There are a few other key differences between the on-stage pitch and the private meetings that follow.

“At a pitchfest you want to create some FOMO and you’re really just trying to get your first meeting. You’re just trying to set the hook, keep it thin and light and catchy,” Cubitt says. “And then when you’re one-on-one and you have an hour of direct facetime, it’s a totally different dynamic.”

Dufresne notes the goal of a pitchfest is often different from the closed-door meetings, because onstage, you’re not just pitching to VCs. Potential customers and future hires could be in the audience, so those five minutes are your chance to promote your brand with the hopes of landing a business card or two later in the day.

No matter who walks away the winner at AccelerateOTT on June 11, the mark of a successful pitch will be the promise of a future meeting and the chance to pitch all over again.