Mike here. Today we’re going to talk about communicating your business and fundraising narrative simply and concisely.
Last month, I spent more time than I’d like to admit rewriting startup’s one-liners to make investors introductions. Recently, I’ve found that founders are trying so hard to show the big vision of their companies, that it’s hard to tell what they do. Here’s a text I sent Max venting about it (yes, we text about fundraising, and typing it makes me feel worse about it). You’ll also see that Max is a courteous texter, replying right away that he would respond later.
Garry Tan from Initialized Capital said it best in the below tweet – plain english is best.
Bad pitch, common:— Garry() (@garrytan) May 3, 2019
Form random sentences using hot buzzwords and rely on social proof for the rest
Good pitch, surprisingly rare:
Use plain English to concisely describe what you are doing in the simplest and shortest possible way
In Y Combinator’s application, their first question is “Describe your company in 50 characters or less.” From YC’s perspective, if you can’t describe what you do in 50 characters or less without buzzwords, then that’s a quick way to get your application tossed. I’ve seen Max review YC applications (including my own back in the day) and rip people up on how they use those 50 precious characters. Usually, it’s because they use buzzwords and don’t clearly explain what they do.
When pitching an investor, simplicity and brevity is even more important. After an investor conversation, you want them to be able to have dinner with their family, talk to another company, wake up in the morning, have a full day of work, bump their head, and then still be able to answer the following questions after two drinks with another investor friend (in a the way you’d want them to).
- What you do (explained in two seconds without any buzzwords)
- The single most compelling thing about the opportunity (could be team, market size, traction, or something else)
- Your core insight (the thing you’ve discovered about your product, market, or business that’s surprising, interesting, and should make someone say “holy shit.”):
- Note: I saw a pitch recently where the startup found a customer acquisition channel where they get paid to acquire customers due to a new regulation. “Holy shit.”
- What you’ve figured out/de-risked about the business so far (how you frame your progress to date)
- What you’re aiming to figure out/de-risk about the business next (how you frame what you’ll figure out with this round).
These are the questions that are the fundamental parts of your fundraising narrative. They should be clear as day.
If an investor quickly understands what you do, then you can always find time to discuss the vision. But if an investor doesn’t understand what you do, then the vision doesn’t matter. Keeping things concise and simple is easier said than done – if you’re struggling with it, over-index on simplicity rather than pitching a vision. “We sell flowers for weddings” is better than “a vendor platform for life’s biggest moments.”
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