Buyer , User , Startups — 06.06.2023

How Investors Can Teach Founders to Pitch

At a glance:

  • Founders often think a pitch deck can win them a check, but even the best pitch deck can’t make up for a lack of vision, competence and skill. VCs want to see a product showing success and a story that resonates with them. 
  • You can help founders by being honest with them about why you won’t invest right now. Don’t feel confident in their idea, business model, or competence yet? Tell them.
  • If you’re not a product expert, but you know that a founder needs product help, call on me for help and build a network of operators with product expertise.

Investors, I need your help! Founders are struggling to succeed because they’re not getting the right feedback. This is me humbly asking for your help — give founders honest advice when they pitch to you. And if they’re not pitching you directly, share this with your front-line team handling deal flow. 

Often, people use the shiny objects to mask a lack of skill, experience or clarity. 

Fifteen years ago, I earned my UX design degree. Since then, I’ve mentored hundreds of students in the master’s program, and I always get the same question: “how do I improve my design portfolio to get hired?” I get asked this so often, in fact, that I always have a presentation in my back pocket ready to give the same advice. 

Much to their disappointment, the advice is not about how to improve their portfolio, but about how to improve design skills and search for the right jobs. The unpopular truth is unemployed designers are either not skilled enough yet, or they’re positioning themselves for the wrong design job. Since a portfolio is tangible, relatively easy to dress up, and the first touchpoint for a prospective employer, designers think that it’s the solution to all their problems. They can use it (obviously with good intentions) to mask what is hard and actually valuable — experience, skill and a clear vision.

The pitch deck is a founder’s portfolio. 

Let me bring this back to your world. Now, I work with more founders than designers, either through informal advising or our sales process. 

Founders struggling to get investment ask me and my team, “What do investors want to see in a pitch?” And my answer is always the same: a product that is showing success, and a story that resonates with them.

While I’m nowhere close to an investing expert, I’ve worked with VCs and PE firms enough to see that most of you genuinely want founders to succeed. And many even want to give good advice to help them. But often, I’m not sure that advice breaks through. Much to their surprise, I turn down founders who are willing to pay us for a pitch deck because I know it won’t help them in the ways they think.

Founders believe their pitch deck is the problem, but it’s not. 

Much like designers believe a killer portfolio is the secret to a great design job, founders think that if they get the deck just right, then they’ll secure investment. But you and I both know that isn’t so. 

So I ask once again for your help — give founders honest advice when they pitch to you.

Here are a few ways investors can improve advice to founders:

  • If the idea isn’t speaking to you, say it. Don’t hide behind vague metrics or a mismatch with your thesis. The best thing you can do is give them honest feedback that you weren’t bought in to the idea, problem or solution.
  • If the business model or product itself isn’t strong, tell them. Often, we avoid this because giving critical feedback is challenging. But it’s a gift for a founder to know up front that there’s a fatal flaw in their plan. Whether they choose to accept it or deny it is up to them.
  • If you like the idea but they aren’t ready, tell them. Most investors do this well. But I’d go further and advise you to tell them to really focus on this aspect of their business rather than raising. In my experience, founders get sucked into the fundraising vortex and lose sight of building a strong product. Help them out by telling them to focus on the business, not fundraising.

Before writing a check, VCs often tell founders to improve particular metrics. While investors use SaaS metrics like CAC, onboarding time, TTV and revenue-oriented metrics to assess product market fit, these are lagging indicators (I’ll talk more about it in an upcoming newsletter because it’s hot on my mind right now). The founder doesn’t know how to affect the lagging indicators. They most likely have no idea what’s causing them, much less how to fix them. So the founder reads blogs and listens to podcasts from growth hackers citing ridiculous case studies or unrealistic comps and tries to copy their unreliable tactics.

On the other hand, investors (no offense) aren’t trained in product and have a problem connecting the dots between product strategy and metrics.

Right now, here’s how you can be helpful:

  • Email me. Seriously this is about half of my day job. I’ve designed so many things that all I need is a list of metrics they’re working on and ten minutes with a product demo to give them helpful advice. 
  • Build a network of operators. VCs historically have large networks, but they often lack product roles. Build resources of UX designers, product managers and product marketers at companies at similar stages to what you invest in (hint: you probably have many of them in your portfolio already!).

Overall, I think investors are immensely helpful and genuinely care. I imagine many of the things I’ve listed you may already do. Hopefully, I’ve offered something new for you to consider, or given you something to share with your team. The responsibility to build great product companies does not fall solely to first-time founders, but on all of us in the ecosystem. 

By providing honest advice that extends beyond the pitch and making impactful product connections, we can help founders make better products and better businesses.

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