VC Secrets: How to Successfully Pitch & Sell Your Startup
Carli Evilsizer | April 17, 2019
For many entrepreneurs, one of the trickiest obstacles to launching their startup is funding. For startups looking for funding from angel investors or venture capitalists it can be difficult to know where to start. What should be included in a startup pitch deck? Should a startup use an angel investment funding or VC funding? What are angel and VC investors looking for?
There are so many mistakes an entrepreneur can make during the fundraising process so we chatted with serial angel investor, Greg Shepard, to learn how to successfully get funding for a startup. Throughout his career, Greg has spearheaded 12-15 company exits with two of his former companies being acquired by eBay Enterprise Marketing Solutions totalling over $900M. Now, Greg is in the process of writing a book titled “Meet the BOSS - the Agile Playbook for Startups” which will provide entrepreneurs an A-Z roadmap on how to build, grow and eventually sell their startup.
Keep reading to learn what VC investors are looking for in a startup brand, what you should include in your startup pitch deck and the big mistakes to avoid when pitching your startup to a VC investor. Greg even shared 3 secrets from his upcoming book for founders seeking to sell their startup!
Serial Investor Greg Shepard Shares His Top Startup Secrets to Success
Serial Angel Investor
Advisor to Pepperjam's Board & CEO
Greg Shepard is a serial angel investor and venture capitalist with a legacy of building and running sustainable growth businesses. He is also an advisor to the Board and CEO of Pepperjam. Driven by a transformational leadership style, Greg has spearheaded 12-15 company exits throughout his career. Two of his former companies, AffiliateTraction and AdAssured, were acquired by eBay Enterprise Marketing Solutions in January 2016 as a part of a cross-brand deal totaling largely over $900M. The transaction comprised of the purchase and sale of more than 14 companies - two of which were Greg’s. Most recently, he has been authoring a book titled: ‘Meet the BOSS - The Agile Playbook for Startups’ due out in 2019.
your startup begins with
an established North Star.”
1. What is a “North Star” and why is it important for entrepreneurs to establish one before they begin branding their startup?
Your North Star represents how you define your internal culture, your product and the value you provide to customers. When marketing your startup, it’s critical to ensure your company mission shines through in your branding. The importance of having a North Star is two-fold. When founders begin building their business without an established objective, they risk moving in a direction that could prove to be problematic later on. In many cases, these entrepreneurs struggle to course correct those decisions downstream. Learning how to effectively articulate your brand builds both an image of confidence in the eyes of possible investors - and provides critical direction for you as an entrepreneur.
2. What should entrepreneurs avoid when pitching?
Skip the education and describe three things to your audience:
How your product is replacing an existing solution for customers.
How you are different from competitors.
A reasonable action plan to execute on this vision.
When pitching for capital, entrepreneurs shouldn’t assume their audience needs to be educated on the ecosystem. It’s likely the investor is already aware of the challenges within your startup’s vertical. Leverage the short time you have with them to showcase why your product is intelligent, innovative and better than existing solutions on the market.
3. How can entrepreneurs improve their pitch deck and market their brand more effectively?
Concise and clear communication is key. Within the first 30 seconds of a pitch - an investor should understand what problem your product is solving. How you articulate yourself, introduce your idea and how well you can confidently answer questions about how your solution works, can make or break your pitch. When considering how to improve a pitch deck - less is more. Instead of starting your pitch with a non-essential focus around how the ecosystem works, tighten up two or three slides that clearly showcase your North Star, solution, company values and ROI.
4. Tell me about your upcoming book! What does it entail and what made you want to write it?
The upcoming book is titled, “Meet the BOSS - the Agile Playbook for Startups”. It’s the culmination of my years of experience translated into an A-Z roadmap on how to build, grow and eventually sell your startup. BOSS is a proven method for sustainable growth and strategic exit planning for entrepreneurs. The book includes testimonials from investors, angels and entrepreneurs telling the story of how to motivate employees, inspire change and recognize patterns that inhibit sales. My goal in writing the book is to empower founders with a toolbox to achieve exits and secure the capital they need to give back. The startup ecosystem is changing the world for good and helping to spread the wealth. I want to contribute to that movement.
5. Describe the importance of having mentors when creating a marketing strategy for your startup. How have mentors been valuable throughout your career?
When starting out as an entrepreneur, I made a commitment to seek out people who could fill in my gaps of experience and industry knowledge. These mentors proved to be valuable resources who helped me grow and improve down the road. As an early stage entrepreneur, look to find mentors who can help you develop and spot areas of improvement within your branding that you may have overlooked. Be open to advice from seasoned founders who have found success - even those who operate in different verticals outside your own. Ask for feedback and be responsive to change.
6. What is one key thing entrepreneurs should always consider when presenting to a VC?
Undervalue your startup and seek smaller sums of money. As in any business transaction, if one party has never worked with you – an automatic gap in trust exists. Failing to address this gap is a reason why some startups fail to get the capital they need. Instead of valuing your company at $20M and asking an angel for $500,000 - ask them for $100,000. Describe to them that their trust in your ability to execute as an entrepreneur is more valuable than an upfront sum. This shows that you respect and understand the risk they are taking. Building their confidence will ensure that they (and their network of investors) seek to invest in you again down the road.
7. What mistakes do founders often make while pitching their startup?
Failing to recognize who their true competitors are. Oftentimes I’ll ask entrepreneurs to cite who they compete with – and they say they don’t have direct competitors, and they are trailblazers in the space. That’s not true. Your competitors include any market player that solves the same problem you do. Even if they are solving it in a different way. For example, if you are creating an automated solution, companies that provide a manual way of solving that problem are still players you are up against.
3 SECRETS TO STARTUP SUCCESS FROM
“Meet the BOSS - the Agile Playbook for Startups”
1. Show an investor you have an exit plan in place from Day One
From Day One - entrepreneurs need to think about the profiles of companies that may acquire them and craft their business model around what will be most attractive to these buyers in the future. Start by crafting your Ideal Customer Profile (ICP), and Ideal Buyer Profile (IBP). By envisioning what a seamless exit funnel looks like from Day One, you set yourself up for success by already anticipating what your purchasing company will want to see.
2. Build relationships with those that may buy your business early on
Having relationships with the people who may buy your business provides clarity and direct insight into what they lack. Knowing early on what your possible acquirers don’t have, uniquely positions you to develop a product to fill these gaps.
3. Proving you can execute, trumps your brilliant idea
An entrepreneur's ability to execute is often more important than their idea. Your business concept may be brilliant, but if you don’t show an investor how you can reasonably execute - you risk them not having enough confidence in your ability to deliver. Prove to your audience that you have a specific, actionable strategy around how to bring your idea to market. Without the ability to execute, even the strongest startup idea can fail.
SECRETS TO GETTING FUNDING FOR YOUR STARTUP
Thanks Greg for sharing your advice for entrepreneurs looking to fundraise and eventually sell their startups. We look forward to reading “Meet the BOSS - the Agile Playbook for Startups” once it’s published!
How Sheets & Giggles Got Funded on Indiegogo in Just 5 Hours