What Makes a Good Pitch? A Q&A With VCs Nikhil Kalghatgi and Steve Schlafman
The verdict is in. The crowdfunding platform for films, Seed&Spark, stole the show and won over SoftBank Capital’s Nikhil Kalghatgi and Lerer Ventures’ Steve Schlafman. As a final wrap up for the season, we asked our investors to share a bit of insight into what makes a pitch stand out and what entrepreneurs elbowing for funds can do to get ahead of the pack.
What do you look for in a good pitch?
SS: The person delivering the pitch is just as if not more important than the pitch itself. That said, the founder should be able to clearly articulate the problem they’re solving, explain why their product or service is differentiated and what they’ve accomplished to date. I also look for founders who have a deep connection to the customer or community they’re serving. Finally, I look for founders who have a strong handle on product and design. There’s obviously a lot more that goes in to evaluating a pitch but these elements are important.
NK: I look for a great company, as investors have seen many pitch tactics over the years. Great companies start at the leadership position, with a very passionate founder whose personal experience and domain knowledge with the problem or solution are more compelling than most up-and-to-the-right charts. Great companies also are differentiated, with inherent unfair advantages over the incumbents, competitors, and alternatives. Lastly, a great company and a great pitch evolves and adapts. A great pitch quickly identifies how it might fit, or not fit, in the investment strategy and adjusts course accordingly.
Can you talk a little bit about the best pitch you have ever gotten?
SS: One that stands out is Rap Genius, a community that is annotating the web starting with rap lyrics. When I first met Mahbod, one of the co-founders, he quickly explained that 2 percent of all searches on the web were for lyrics. He explained all the reasons why it was an underserved segment on the web and why the founders had built it for themselves. When he explained their users were annotating things like Magna Carter and Declaration of Independence, it was evident they were building a passionate and real community.
NK: I was convinced to invest in FlightCar and in Moat after a single meeting. One was a breakfast and one was just a call. Despite being at opposite ends of the domain experience spectrum, both had incredibly passionate founders and demonstrated the ability to find, test and follow-through on their opportunity better than anyone else I had seen in their space. I had gained tremendous personal respect for the entrepreneurs and wanted to see them succeed.
What do you think makes a good deck?
SS: I don’t spend a lot of time reviewing every last detail in the deck. I usually review for ten to fifteen minutes before a pitch session or to determine whether to take an in person meeting. A good deck is usually no more than ten to fifteen slides. Too much text is overwhelming. Keep it simple and visual. I definitely want to see the brand. It doesn’t really need to cover much more than: problem, product / solution, mission / vision / purpose, traction / milestones, market, customer acquisition, competition / advantage, roadmap, financing plan and team.
NK: I don’t invest in decks, I invest in companies. A good deck serves a simple and temporary purpose. If you are early in your process and trying to get a meeting, then it’s purpose is simply to get the meeting and nothing more (often a teaser deck/exec summary or paragraph). Often a deck is used to help an investor convey a business idea to his or her colleagues. For that reason, my preference is simplicity (note, not to be confused with brevity) and data > pictures > words
What did Seed & Spark do in their pitch that made you want to pick them? What made them stand out?
SS: Emily was great. She exuded confidence and clearly articulated why Seed & Spark needs to exist in this world. Most importantly, she proved to us that her product is working and solves a real problem that she experienced first hand. You can’t fake her passion and knowledge.
NK: The passion for the business was so salient I wanted to help in any way I could. It was very impressive.
Advice for budding entrepreneurs?
SS: Raising money is often a marathon and not a sprint (sorry for the cliche). Be patient and do your homework on potential investors. The process can take months but it’s very rewarding if you find the right partners.
NK: Get a consigliere type of character in your inner circle that you can use as a regular soundboard, and can show you the basic lay of the land. Don’t expect 100 direct introductions from that person, instead, expect them to help you figure out the 100 best paths to all the people you need to meet.