🧠 Deep dive — 5 pitching mindset shifts (and 5 mistakes to avoid)
By avoiding common mistakes and thinking like the founder of a fundable startup, you can dramatically increase your chances of getting capital.
Hey friend 👋
Last week, I had the privilege of speaking to portfolio companies in the Valley Ventures Accelerator about pitching to investors.
Rather than the usual cliché of “here are the 10 slides you need” or the minutiae of vehicles and cap tables, I chose to talk about the mindset of pitching.
I thought you’d enjoy the key takeaways.
Let’s dive deep 👇
5 mindset shifts to adopt
The most important part of a winning pitch isn’t the slides or the script.
It’s one square foot of real estate that sits atop your neck.
What separates founders who successfully raise a round from those who don’t is how well they understand the process, how realistic their expectations are, and how well they grok how the people on other side of the table hear what they’re saying.
Here are five ways to change how you think about fundraising:
Shift 1: Shark Tank isn’t real.
When you pitch for investment, you’re actually not pitching for investment.
You’re pitching for another meeting.
The idea isn’t to give a pitch and leave with a check — or even with a commitment that you’ll get a check. The first pitch is to get sufficient interest and to prove you have sufficient credibility to warrant the win, which is:
“Let’s talk more.”
In subsequent meetings, you’ll meet more people, talk in more detail, and, if it’s a good fit for all involved, begin the due diligence process — which is roughly equivalent to having your prospective mother-in-law rifle through your underwear drawer looking for any possible reason to call off the wedding.
But when you pitch, it’s just a first date.
And both of should define success the same way: knowing by the end of the first date whether you want a second one.
Shift 2: Fundraising is a process.
And a long, arduous process to boot!
To start with, it takes longer than you think:
The average Seed takes 3-6 months from start to close, and it only goes up from there: Series A takes 6-9 months.
In fact, one of the reasons investors want startups with more than one founder is because fundraising alone often becomes a full-time job for one of them, and someone has to, y’know, run the company.
For that Seed round, you’ll be pitching 50+ times. Series A? 100+.
You’ll be networking with hundreds of potential investors, prospecting and pursuing dozens of them at a time.
Most serious fundraisers even have a CRM and a defined process.
Fundraising is a skill that founders have to develop. It takes practice, and it doesn’t happen overnight.
So, I guess…. plan your runway accordingly. 😅
Shift 3: Pitch performance matters less than you think.
It’s not that performance doesn’t matter; it absolutely does.
But it’s nowhere near the top of the list.
Honestly, most of the time, you’re not even pitching in front of a crowd — but to a few people across the table from you.
Heck, your first “pitch” is most likely not presenting to a group, but talking with one person, standing casually somewhere, on the edge of a crowd, drink in hand.
And even in a “formal” pitch, you’re likely to get interrupted with questions, and to need to bounce around in slides, and so forth.
Because of that, turning it into a performance can actually backfire. A really common mistake?
Call and response.
“Show of hands, how many of you have ever…?”
Ick.
You’re not doing a set at the Improv. It feels sus, it can backfire, and it ultimately doesn’t matter if the people in the room are your customers — that’s not why you’re talking to investors.
These kinds of performance tricks just don’t work in an investment pitch.
In fact, want a good rule of thumb?
Don’t say anything in your pitch you wouldn’t say sitting across from one person at a coffee shop.
Shift 4: No one funds the B team.
“A“ teams with “B” ideas are preferably to “B” teams with “A” ideas.
It’s hardly an original thought, but it’s worth internalising:
A strong team will pivot that “B” idea into a successful business, while a weak team will flub the “A” idea into a costly failure.
Team begins with the founders:
Do you have relevant experience or expertise in this market?
Do you have a successful track record as founders?
Do you have an unfair advantage?
Less obviously, though, the team investors look at is much more than founders and co-founders.
Founders have help along the way — formal and informal advisors, board members, other investors, etc. If serious people are taking you seriously, we’re more likely to, as well.
In fact… startups with a formal advisory board are 29% more likely to succeed.
Eventually, it’s even more than founders and advisors — it’s your ability to attract and retain talent. You may not have a rockstar CTO as a co-founder, but were you able to deploy your reality distortion field hire one?
Holistically, the idea of team is simple: why are you the right people to pull this off?
Shift 5: Investors have a business model, too.
As you likely know, you’re not the hero in the story.
Telling your customers how awesome you are doesn’t make them buy. What does is telling them how awesome they’ll be by using you.
Ditto for investors.
This is where you have to understand their business model.
Awesome idea + Ability to Scale ≠ Success
In the early days, investors’ business model is dependent on you reaching the next round of funding — not a distant exit!
So don’t spend so much time on your awesome idea that you neglect to mention:
how much money you need;
what exactly it will be used for; and
how that money will help reach key milestones.
This is a two-way street.
They have cash, but it doesn’t do them any good sitting idly in a bank account. You have a business, but it doesn’t get anywhere without some seed.
Investors aren’t doing you a favour. Nor you them.
5 mistakes to avoid
Honestly, making a list of only 5 mistakes was much harder to curate!
It’s not because there are just so many mistakes I see founders make — though there are enough that I did a whole YouTube video about them — but it’s because many mistakes are dependent on stage and strategy.
Also, because bitching is more fun. 😅
But… here are 5 mistakes I see every week:
Mistake 1: Breaking with tradition.
Pitches are stories, stories have structure, and structure creates predictability.
Potential investors hear a lot of pitches — hundreds, maybe thousands.
They all start to sound alike, and that’s where you might think it’s best to stand out; be different.
But it’s actually the time to blend in.
As I said above, the goal of a pitch isn’t to get a check — it’s to get a second meeting. Ultimately, investors trying to answer a single question: is this worth further discussion?
To that end, the audience is trying to get information as quickly as possible, so that we can digest, evaluate, and compare.
For that efficiency to work, the “heavy lifting” is actually done by the pitch format: it creates expectations and allows for shorthand.
When you break that convention, you increase the cognitive burden on the audience, which means we surprisingly hear less of what you’re saying.
Frankly, we don’t applaud your creativity here. We find it frustrating.
And we just lose interest.
Mistake 2: No compelling opportunity.
By definition, a company is “venture-backable” if it’s scalable. It’s only scalable if it’s using potential economies of scale to solve a problem in a big (and growing) market.
But a “big market” doesn’t just mean there are a lot of people in it.
There also has to be desirability:
Lots of potential customers; AND
A big, unsolved (or poorly solved) problem; AND
A scalable, lovable, truly differentiated product that solves it; AND
An eagerness to pay for it.
When looking at your addressable market, don’t just consider the people and problem. Consider their eagerness to solve it.
A pitch must include the size of the market, the severity of the pain, the urgency to solve it, and the evidence for why this is the right solution to it.
That’s what makes an opportunity compelling.
Mistake 3: You have no competition.
There are few things more cringeworthy than a founder saying they have no competition.
Because you’re confessing one of three things:
You don’t know the market well enough to understand who else is trying to solve this problem;
You haven’t found a problem important or urgent enough for anyone to solve for money; or
You don’t understand the problem in the context of your customers.
The first two are obvious. Let’s zero in on that third one.
If you’re solving a problem worth solving — one of those problems that causes pain severe and urgent enough to warrant solving — then the customer must be doing something to try to address it.
If the customer is doing nothing to even try to make the situation better, then how could it possibly be important enough to spend time and money for you solve it for them?
So let’s assume they are doing something.
Whatever that something is… it’s competition.
Even if it’s not a competitor.
Founders often define “competitor” so narrowly as to remove any value: they’re only the competition if they’re a product roughly the same as ours that is roughly as good as ours.
But even if the alternative is neither a product (or even a product of significantly lower quality), it’s still competition.
Competition ≠ competitors.
Mistake 4: Lightweight go-to-market strategy.
Go to market is the intersection of three things:
An early adopter that gets you into the market;
An efficient means of getting a message to them; and
A business model that makes it pencil out.
The biggest mistake founders make is to keep this high level: we’ll run Instagram ads; we’ll use influencers; we’ll do network outreach; etc.
It’s a magic wand, and magic wands are lazy. We hate them.
And you should, too.
Instead, use the “how” shovel — dig deeper by asking how. Don’t stop until you get mired in detail only the experts care about.
After all, if you can’t get to that level, how can we expect you to execute on it?
Mistake 5: Unclear value proposition.
Vagueness in your value prop is a solid predictor of failure.
As the founder of a fundable startup, you should be able to clearly articulate for whom you are creating value, what value you are creating, how you create that value, and why you’ll be able to capture enough value in exchange to make this whole thing interesting.
But it’s not enough to just point in the direction of potential value.
Things like “faster” and “easier” are neither clear nor compelling value propositions. They are almost never sufficiently motivating to warrant switching to a new solution.
If you don’t understand your customer’s experience well enough to articulate precisely where the pain is, you need to find out. Until you do…
Do not pass GO. Do not collect $200.
To put it all together…
Investors are looking for a credible theory of hugeness.
By avoiding common mistakes and thinking like the founder of a fundable startup, you can dramatically increase your chances of getting capital.
In this deep dive, you learned:
5 mindset shifts that increase your chances of success:
Shark Tank isn’t real.
Fundraising is a process.
Pitch performance matters less than you think.
No one funds the B team.
Investors have a business model, too.
5 mistakes to avoid flubbing the pitch:
Breaking with tradition.
No compelling opportunity.
No competition.
Lightweight go-to-market strategy.
Unclear value proposition.
And that’s it for now. Have a fantastic rest of your week!
—jdm
PS: if you’re the founder of a fundable startup, and if you’re located in the Sacramento area, we’re accepting applications for Cohort 2 of our Founder Mastermind. Check it out →