Phin Barnes recalls how, when his VC firm First Round Capital was deciding whether to back the meal-kit delivery service Blue Apron, founder Matt Salzberg's eyes lit up as he nerded out on logistics details. When Greycroft Partners led a $30 million round for Thrive Market, an online wholesale-buying club for health-focused food, investor Dana Settle said that besides the company's great metrics, the two co-founders' completely different and complementary skill sets sealed the deal. While there's no formula to make a memorable impression on investors, there are rules of thumb. Below, three VCs note the best pitches they've ever received and what you can learn from them.
Don't Pitch Until You Know You'll Nail It
There's nothing more powerful than waiting to pitch until it's obvious your startup is killing it. That's how Talkdesk, a San Francisco-based company that makes cloud-based call-center technology, landed $12 million from Silicon Valley VC firm DFJ Venture. "At the end of the day, VCs make decisions on very little data, so the more data you can provide, the more you bring them into your business and the more trust you build," says COO Gadi Shamia.
When Talkdesk pitched DFJ partner Josh Stein, the company had crossed the $4 million revenue run rate and had generated $1 million in net cash in the previous six months. "They kept it very lean, raised a very little bit of money, and spent it very carefully," Stein says. "They waited until they had sort of cracked the code on the product, and until the metrics were brain-dead obvious. That's when investors will be begging you to take their money, instead of the other way around."
Research the Heck out of Every Investor You Pitch
Knowing your target VC's particular investment interests is basic; showing that you also understand how said investor likes to operate is what gets you noticed. When Dan Shapiro approached Foundry Group's Brad Feld about investing in his Seattle-based 3-D laser-printer company Glowforge, he knew Foundry had previously backed MakerBot. But as a devoted reader of Feld's blog, Shapiro also knew a few critical details: Feld insists on short emails and prefers founders who are more passionate about their products and people than their numbers. "And I knew he was going to be thinking about 'Are we going to work well together?' " says Shapiro. His initial to-the-point emails worked on a number of levels. "All of the interactions fit our style--it was a relentless back-and-forth of substance," says Feld. Foundry Group, which is based in Boulder, Colorado, put $5 million into Glowforge's $9 million round in May.
Ask for Advice. Then Take It
Entrepreneurs ask investors for advice all the time, but few follow it. When Leura Fine first approached Paige Craig, a Los Angeles VC she knew socially, about launching her West Hollywood-based online interior-design marketplace Laurel & Wolf, she asked for feedback, not money. Craig spent several hours explaining how to launch a tech startup and gave her a list of to-dos. Three months later, Fine reported her progress: "I had a co-founder; I had persuaded people to come work for me; I had a minimum viable product" that had 1,500 customer sign-ups. Craig was floored. Thirty minutes after the meeting, he committed $100,000 to Fine's seed round, his partner put in $80,000, and Craig offered to find other investors to complete what became $1.1 million in funding. The draw? "She had executed on everything and even surpassed whatever expectations I had," Craig says.