What's at the core of a great pitch?
How to tell a story so investors will listen
VCs invest in startups when they believe the story that a founder is telling. Your story might be unique, but there are only a few ways to tell it to investors. Loosely, founders use:
Short form - 1 liner, blurb, and elevator pitch
Long form - pitch deck and memo
Free form - conversations and talk tracks
Each of these formats are useful at different points along the fundraising process. Before you start working on any specific kind of pitch, though, you need to nail down the most compelling parts of your story. At YC, we called them vertebrae. These are the main ideas that anchor your story.
Think of these as the sentences you can say that will get investors excited to ask more questions. While these will vary between startups, every pitch must start with what the business does.
This is best accomplished by describing what your company does today in a short, visceral, immediately understandable way. These two goals - being concrete and inspiring interest - seem to be in opposition, which is where founders often go wrong. The most common mistake in a short description is to reach for fancy sounding marketing speak or grand pronouncements about the future.
Once you’ve figured out a good way to describe what you do, you’ll use some mix of the following to hook an investor:
Traction (when you have some, this is generally the most powerful point to make)
Market (the validation that what you’re doing has the ability to be gigantic)
Founders (unique advantages in attacking a market/problem)
Vision (when told right, extremely compelling. When told wrong, extremely risky)
For a blurb, mix and match these points to build out a 3-6 sentence script about your business. Sometimes, all you need is “We do X, we’re growing 100% each week and crossed $10M in ARR.” Other times you’ll need a few sentences to establish a market and a compelling insight. The best thing you can do as you work on your script is to try it on actual people. You’ll know when you are getting it right based on how your audience reacts.
As with any story, founders need to understand the mindset of their audiences. Investors are optimists, but are exposed to hundreds of pitches which tends to make them skeptical.
Your goal is to break through the noise with clarity. Don’t start by one-upping someone else’s ambition - that’ll happen later. One thing I’ve noticed over time is that clear communicators are significantly rarer than ambitious people. Clear communication also seems to be highly correlated with long term success. Think about your short description as a way to demonstrate your clarity of thought and to lay breadcrumbs to your big idea.
We’ll talk more about long form and free form when we talk about deck preparation and pitches, but don’t overlook the vertebrae and short form - these can be the hardest yet most important to get right.
Do’s and Don’ts of storytelling:
Do:
Be concise
Be truthful
Have conviction
Say the big good things first
Use concrete examples
Don’t
Use jargon
Be arrogant
Make unsupportable claims
Ramble