Startup Life/Opinion/

Here’s what it means when a VC asks for a pitch deck

Deciphering investor feedback can be key in improving your pitch for next time

Slush 2021 / (C) Petri Anttila
Anthony Rose

By Anthony Rose

As a founder, it’s easy to become disheartened by the pitching process — and for good reason. When the answer is no, the feedback as to why can be vague, unclear and surprisingly short. 

It’s an incredible lost opportunity. Investor feedback can help founders improve and land the funding they need. A good feedback loop can keep the door open for conversations with an investor in the future. 

It might be difficult to get asset-rich, time-poor VCs to give better feedback, but you can give yourself a head start by learning to decode investor feedback. Here are some common confusing things founders hear from investors, and what they really mean. 

‘Would you ever think about joining an accelerator?’

This sounds encouraging but what this means is disheartening: the investor thinks your business is currently way off being investable and you need to get some help. 

The investor feels you aren’t at the right stage in your business journey for them to get involved right now. Perhaps you haven’t demonstrated how you intend to grow your business, or maybe your valuation just doesn’t add up. Either way, this investor thinks you’re standing out as a newbie and not speaking the same language as other founders who know their stuff. 

“Remember that this kind of feedback doesn’t mean the end for your business. It’s part of the natural process of refining and growing your startup”

In this situation, there are plenty of resources to help you get to where you need to be. Connect with a community like Founders Factory or explore resources for startups online to discover where you might be falling short and how to rectify it. It can be helpful to find a business mentor to help you piece together what’s currently missing from your plans and pitch. 

‘I’d love to hear more but I just don’t have time right now. Can you send me your deck?’

This piece of feedback can be interpreted in different ways. You might hear this after an initial meeting with an investor who hasn’t been wowed by your pitch. From my experience, this feedback usually means one of the three things:  

  • The investor hasn’t grasped what’s different about you and your business. You’ve either failed to intrigue them or there’s someone else in the market who’s already doing what you do, but better.
  • The investor is confused by your pitch deck and they want to pass it on to another member of their team to see if it’s worth investigating. 
  • The investor simply isn’t interested in your idea and doesn’t want to give you clearer feedback or a specific reason why. 

No matter what the investor actually means by this feedback, it’s clear you failed to excite them — otherwise they’d be more keen to see you again to talk about investing. If you hear this feedback, revise your pitch to make it more exciting and better demonstrate your company’s value. 

‘The business sounds great but who else is in your funding round?’

It’s the investor’s job to get a return on their investment (or on the money invested in their fund) which means that they aren’t typically big risk-takers. Often, they want to know if anyone else sees value in your company before they commit to investing themselves. This leads to a circular problem: how do I get the first investor on board to entice more investors down the line?  

One way around this Catch-22 situation is to take investment ahead of a funding round using a convertible note or (for SEIS/EIS investments) an advanced subscription agreement, which allows investors to put money in now and subscribe for shares in the next funding round. 

“Try practising your pitch with friends or family, and then ask to check if they understood your business”

At SeedLegals, these kinds of agreements have become a popular way for companies to make small investments quickly. This method allows you to carry on developing your products or services while you work on your main funding round. The work you do using the money from advance investments helps to show bigger investors that you’re making good progress. And because others have already committed their investment to your company, this reassures bigger investors that there’s less risk for them to hop into your funding round.

‘What you’re doing sounds interesting but it doesn’t fit with our investment thesis’

There are two things this could mean:

  • You’ve pitched to the wrong investor and you’ve not done your homework — for example, you’re pitching a fintech SaaS to an investor who only invests in food and drink startups, or you went to a VC fund that usually invests £5m in Series A round for your £300k seed round. In both cases, you didn’t do your homework.
  •  They have no idea what you’re talking about and want to know why you’re pitching this to them.

The investor might be trying to tell you they don’t understand your business proposition, they can’t see the value in what you’re selling or it just isn’t the right match for them. If you think this is the case, try practising your pitch with friends or family, and then ask them questions to check if they understood your pitch and your business. 

If you hear any of these feedback comments — or anything else that’s confusing, dismissive or terse — remember that this kind of feedback doesn’t mean the end for your business. It’s part of the natural process of refining and growing your startup. Your proposition will become stronger, more precise and more engaging. As you distil and refine your messaging, you’ll engage with investors in a more confident and authentic way. All feedback is good for your business. 

Anthony Rose is cofounder and CEO at SeedLegals.

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