And more advice from Phil Nadel, Co-Founder and Managing Director, of Forefront Venture Partners and Investor on the podcast, The Pitch on Gimlet Media, "where real entrepreneurs pitch to real investors—for real money." Forefront Venture Partners is one of the largest and most successful AngelList syndicates.
1. Do not overcomplicate your pitch.
Explain the problem you are solving, how you are solving it, and why you are the best team to solve it. Tell a compelling story that is easy to follow and don’t get lost in the weeds. The goal is to generate enough interest that investors want to learn more. You are not trying to get an investment commitment immediately following the pitch. Take it one step at a time. Save the complicated details for later meetings and make the pitch easy enough to understand that your mother would get it.
2. Do not do a monologue when you are pitching.
The best pitches are dialogues, where founders encourage interaction and questions. You can also ask the investors questions to engage them further and customize your pitch. Make sure you occasionally check in with the investors during your pitch to make sure you haven’t lost them..
3. Do not pitch without knowing your KPIs and your plan to scale the business.
This information is critical, especially if the company is post-revenue. For most types of companies, founders should know at least the following metrics cold: CAC, LTV, CAC recovery time, churn, and profit margin. It’s also important to know the trends you’ve been experiencing in each of these KPIs and what levers you intend to pull to improve these metrics post-raise. You should also be prepared to tell investors exactly how you plan to deploy the capital you are raising.
4. Do not raise too much or too little capital and do not raise at an absurdly high or absurdly low valuation.
You need to be in the "just right" Goldilocks Zone when it comes to post-close runway and valuation. We like to see a minimum of 12 months post-close runway, but we prefer 18+ months. We want the founders to have time to focus on growing the business, learning and iterating, and hopefully showing some meaningful improvements before having to focus on fundraising again. Being off the mark in terms of valuation will turn off a lot of investors. If the valuation is too high, investors will feel like they are overpaying. If the valuation is too low, it indicates either ignorance or desperation. Or sometimes it’s a result of getting bad advice from current investors and advisors. Either way, it isn’t good. Vet these numbers in advance with those who have direct, current experience.