The Truth About Pitching

As a founder, I spent valuable time and energy on decks and meeting with people who did not care about my business. Ultimately, all funding came from existing relationships, not a single one from my deck or pitch.

Being on the other side of the table now, the traditional pitch wastes time for both the founder and the investor. It really should be five questions instead of a deck. Just give me the answers to five questions, and if those are within the target range, we will talk further. They are as follows:

1. How many people are on your team?

2. Has everyone on the team quit their job to do this?

3. Do you have an MVP that people are spending money on?

4. What is your team goal for the next 30 days, 90 days, and year?

5. What open positions do you need to fill today?

Team questions

Four of the questions concern the team's state. Notice that there is nothing about who the team members are, where they went to school, or their previous employment. The reason is that if everyone onboard is not committed, then it does not matter.

Open positions

The fifth question on open positions is a test, as most founders will explain they need an engineer, salesperson, or marketer. However, the correct answer is someone to delegate all non-revenue-generating activity to. We want to see an executive assistant followed by a customer support or onboarding representative as the first hire.

Product question

We do not care what the product is yet. The product question is, do you have a sellable product that is currently generating revenue? If the answer is no, then there is no need to meet yet. However, we want to talk if there is consistent revenue, even if the product does not fit our thesis.

What is missing

You may notice that we do not ask how much money is needed. This is because it is not a deciding factor in an initial meeting. Besides, most founders have ranges in their financial models: if they raise X, they do Y, and if they raise Z, they execute another plan. We want to know their plan for everything going as planned and their backup when it does not.

Deal flow

When cash flows from an early product that does not fit our model, we will pass the deal along to an investor with a more related thesis. We do this to build relationships.

Conclusion

As a founder with two exits and two dismal failures, I look at deals differently from those who came into investing out of college. Everything we do is based on what we know accelerates growth and avoids the red flags that no time and money can fix.