Nailing your pitch: how to adapt to the tight tech market

With 2021 setting records for capital investment in B.C., recent underwhelming data from the Canadian Venture Capital and Private Equity Association (CVCA) should be taken with a grain of salt – and a healthy dollop of expert advice.

On the one hand, 2022’s fall has been precipitous. During the first half of this year, B.C. absorbed $807 million over 58 deals, down from $1.83 billion and 66 deals in the same period of 2021. On the other hand, the current data is still on pace to obliterate 2020 and most years before that. The takeaway: Record-setting capital investment is the “new normal” in B.C., and that’s a very good thing for the tech sector.

That said, hot investment markets typically lead to greater competition among players vying for pieces of the action. At the same time, the 187-percent drop between this year and last means that fewer investment dollars are available to companies that are still relatively flush with resources and positioned to scale. In other words, a good pitch might not cut it with investors at this time. A great pitch, however, always has a better shot, which is why I asked two pitch masters – Chris Neumann (CN), General Partner at Panache Ventures; and Hootsuite Founder Ryan Holmes (RH), who also founded the $20-million pre-seed fund LOI Venture last year – to share their insights on how to rock the boardroom.

Q: What do all successful pitches have in common?CN: The best pitches clearly and concisely explain to anyone – not just an expert in your space – the following key points:

• What is the problem you’re solving?

• Why is it important to solve it?

• Who faces the problem?

• How prevalent is it?

• What is your unique solution?

• Why are you the team to solve it?

RH: LOI Venture recently published this blog post that talks to this exact point. It was inspired by Romeen Sheth, another angel investor, who talks about the five key ingredients to nail a pitch:

1. Problem: Is this an issue?

2. Solution: Do you have the fix?

3. Market: Is this a big enough issue?

4. Business: Can you make money?

5. Team: Can you pull it off?

If you can hit those five marks, you’ll convey a powerful pitch to investors.

Q: What are a few ways companies can break through the clutter and get a meeting with a VC?

CN: Beyond warm introductions, send a concise cold email that (a) demonstrates that you understand what the VC invests in, (b) shows why your company is a fit for their investment thesis, and (c) shows early traction/proof points that support your market hypothesis.

RH: Prove you’re three chess moves ahead of them. Do the research, think outside the box, put yourself in their shoes. To stand out from the noise:

• Get creative with the back door. Make a creative ask in public, or hit up the LinkedIn/Twitter DMs with a personal touch.

• Can’t go wrong with a personal friend of a friend intro.

• Reference check something they’ve said last week or last year that you’ve been building around. Hyperlink their podcast, screenshot their newsletter, use their ammo to your advantage.

• Flip the table. Ask VCs what they can do for you. Remember, this is a two-way relationship. All too often, founders get caught purely selling themselves and not asking the VCs to do the same.

Q: How can startups adapt their pitches to difficult market conditions?

CN: When markets are challenging, investors won’t be inclined to “round up” or give you the benefit of the doubt. That means your pitch needs to be on point, particularly as it relates to early traction and proof points. Even if you’re just getting started, the more you can demonstrate that you’re focused on fundamentals and objective evidence, the better. This is not the time to drink your own Kool-Aid.

RH: Many of the largest tech brands began in down markets, and there’s a bunch of data showing that market downturns are a great time to start a startup. Don’t make this your excuse. Remember: Funds HAVE to make investments regardless of what’s happening in the public markets. If they don’t, they need to return capital to their LPs (limited partners), and close shop.

Don’t overlook the ‘Six Ps’

Sometimes the best way to nail a pitch is to practice incorporating the aforementioned tips while learning other key strategies such as playing to your niche – because all VCs are niche these days – and referencing blog posts and social media content posted by VCs – because many are active on social, especially on LinkedIn.

That’s where Switchboard’s Pitch Training Workshops come in. As well as helping you to master the “Six Ps” – Proper Preparation Prevents Poor Pitch Performance – the customizable sessions cover everything from leveraging connections for introductions to adapting a pitch to current market conditions. To learn more, call 604-724-4357 or email [email protected].

In closing, I’d like to thank Chris and Ryan for sharing their brilliant insights and encourage readers to check out the Anthony Robbins video Ryan recommends for founders to watch right before pitching. Spoiler alert: Sylvester Stallone gets his dog back in the end!