At HealthX we’re excited to be getting about 40 companies per month reaching out to us. Often founders ask us what we’re looking for when they’re invited in for a pitch. Some have pitched other venture capital firms or angels, while others don’t have much experience. Either way is fine by us. There are many resources out there advising founders on what investors are looking for so you have to decide what advice to take.
But from our perspective, one of the most important things is not to get too caught up in the details. We will want the details, but first we want to get excited about your opportunity. As a former journalist, I think of pitches a little like writing a newspaper story — with some of the same inverted pyramid elements. Tell us the Who, What, When, Where, and most importantly Why, before we get into the harder, detailed questions about the opportunity.
Here’s a little more about how that might look for the initial pitch:
- The lead: Just like a newspaper story, start with the most important elements of your company’s story: What are the most exciting, attention-grabbing elements? This is your “lead sentence.” Use strong words and nouns and keep it simple. You will expand on all of this information, but you want to grab attention and prevent the listener from getting distracted.
- The What: Quickly provide the what. A clear description of what you do, what problem you are solving in the market and the size of the opportunity you are going after. Include information about who is actually using your product and how much they paid for it. This seems like a no brainer, but I’ve sat through pitches where a catchphrase is thrown out (looking at you, big data) but I’m still unclear on the actual business and product/service 20 minutes later. Don’t assume we understand technical aspects of your company – some on our team might, but others won’t. Better to be safe in making sure your audience’s understanding is clear.
- The When: Provide context for the story early on – this is the when element. How did you get to here? We’ve heard pitches from “startups” that are over 10 years old. Not ideal, but better if it’s clear up front rather than us learning later and feeling like it was kept from us.
- The Why: Why are you before us telling us about your company? Specifically, how much capital are you trying to raise and what are you going to do with it (what milestones are you going to hit)? You are not the only company attacking the space, why are you the ones who are going to win? This often leads into…
- The Who: Outline the founders’ backgrounds, key team members and key advisors. Highlight experiences and connections that are relevant and be clear about the people’s roles: Are your advisors informal or do they sit on your board? If you have investors already, who are they and what value are they adding to your company?
- The How: Tell us about how you’re going to grow the company, provide a model of how long it will take to get to breakeven, and show financial projections based on best and worst case. Show us you’re comfortable with taking an investor’s money by talking about when you would want to sell the company and who in the market would be potential acquirers.
- Wrap it up: If you cover these elements, hopefully you’ve weaved together a pretty good story. Wrap it up and open up for Q&A where more details will be drawn out.
In the Q&A portion, if it hasn’t already started, we hope to learn from you what you are looking for in an investor. If we become partners, where do you need the most help? With a team of five, HealthX plans to be an active resource for you and your team, assisting you with operational issues big and small, helping you with core business processes, introducing you to customers, and more. Is that the type of investor you’re seeking and do we seem like a good fit for your needs?
Lastly, we hope we’ve gotten to know you during the pitch, but just a reminder to add color and humanize your story. We understand it’s nerve-wracking to present something you hold so dear, but part of what we’re looking for is people who we want to work closely with, as should you be looking for the same. If we were to invest, we need and want to be able to tell your story as well as you can. We’ll do that by getting to know you and your company, and we’ll want to do that by easily recalling the details and anecdotes that make your story so memorable.
Dan Blake is a partner at HealthX Ventures. He also spent a number of years as a reporter at the Chicago Tribune.