The 14 Phrases Every VC Wants to Hear in Your Pitch

Businessman talking to colleagues in office meeting

Mark Rampolla‘s article in Fortune is must reading for anyone attempting to raise money from VCs, angel groups or even individual investors. Rampolla is the co-founder of Powerplant Ventures, a VC firm that invests in food and beverage startups, so he knows what he is talking about.

Basically these phrases are answers to the questions virtually all investors will have about your startup, so by answering the questions before they are asked you’ll leave the investors both impressed and able to focus on why they should invest in your business and not on questions you either didn’t answer or answered poorly.

As he says:

First impressions are critical. What you say and how you say it in the first five or 10 minutes of our initial meeting will likely determine if we even bother to evaluate your company’s potential. Though there are no magic words that will automatically get us to invest, here are some phrases we love to hear during a pitch.

To get the full list of fourteen sentences, go to the article, but I’ll just quote a few important ones here.

4. “I don’t know. Let me look into that and get back to you.” When you don’t know the answer to a question, we’d prefer that you’re honest. Being upfront instead of manufacturing an answer demonstrates humility, integrity, and consideration for our own intelligence.

7. “Here’s what our team looks like today, but we know we need to beef up X. The next three hires we plan to make are A, B and C.” This shows you’re aware of any current gaps in your team, and have a strategy for filling them once you receive funding.

9. “At a monthly revenue of X, we should be able to break even. We believe we can get there in 24 months, but if it takes us an extra year we will still have Y in cash.With a burn rate of Z, we can get through another year before we need to raise another fund.” We want to see that you know your numbers cold, without having to pull them up, and are already planning for contingencies.

I see a very positive trend in the venture capital industry of leading VCs taking the time and making the effort to educate entrepreneurs. What was a totally opaque process back in 1989 when I raised VC funds for my first company has become much more transparent thanks to VCs like Brad Feld, who I believe pioneered this vitally important trend, Fred Wilson,  Jason Shuman. and now Mark Rampolla.I encourage you to follow these VCs on Twitter and read their blog posts. I guarantee you will learn a lot about the investment process and how to build a successful startup.

 

Author: Mentorphile

Mentor, coach, and advisor to entrepreneurs, small businesses, and non-profit organizations. General manager with significant experience in both for-profit and non-profit organizations. Focus on media and information. On founding team of four venture-backed companies. Currently Chairman of Popsleuth, Inc., maker of the Endorfyn app for keeping fans updated on new stuff from their favorite artists.

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