Preparing for the pitch | Arianna Simpson

[Music] thank you I feel like most people think of fundraising as just about as much fun as chewing glass and if that's how you're feeling about it going into demo day I totally get it I've been there prior to joining Andreessen I raised money for two of my own funds and I've also been on the receiving end of literally thousands of pitches over the years so I've seen uh one or two things and hopefully today we can walk through a few steps and key learnings that will help make the process a lot less painful um

and you know not feel nearly as bad as as glass doing so what we're going to start with today is kind of how you actually want to run the entire process so from start to finish how are you going to think about the story you're going to tell how you're going to position your narrative then we'll get into some of the actions you're going to take before you start pitching obviously we'll touch on the pitch itself and then the types of follow-up activities that are super important after you're done with your pitch so most people

think about pitching as revealing information but it's really more about answering questions so these are two of the most important ones that should really help guide your narrative you want to be thinking about what is the total size of the opportunity here assuming you nail it hit it out of the park what is that going to look like how big is this Market how big is your vision how big is the opportunity and as a second follow-up you're going to want to make sure that you're positioning your team as the right people to execute on

that Vision making sure that you demonstrate how your experience feeds directly into your ability to win this Market a question I always like to ask is how what is this going to look like if everything exists is successful in five years and the answer to this question is the key theme of your pitch you want to make sure to bring the investor Along on this journey as you paint that picture for them so I'm going to pause for a second and let you think about what your five-year vision is and how you might articulate it

to an investor so as you're coming up to the pitch itself you're going to want to make sure that you have an organized plan for how to approach things so first of all you're going to sit down and literally make a plan how are you going to run the process what is the timeline going to look like you're also going to kick off with the list of investors making sure that you know who the right people are and organizing those conversations strategically so that you're meeting with the friendliest folks first it's inevitable that your pitch

is going to get more crisp more concise and more effective as you practice it and you may also encounter some tough questions as you're starting out so the more you're able to um really think through what those conversations are and practice in advance the better position you're going to be you'll also want to make sure to really understand who the investors are that you're going to be speaking with and whether they have made any investments in the relevant category I think a very um telling example comes to mind which is Brian Armstrong who you heard

from earlier in the cohort had said at one point in an interview that he had a really challenging time obviously coinbase has gone on to massive success but when he was starting out um raising his seed round he had a hard time meeting an investor and selling them on both Bitcoin and coinbase if they hadn't already heard of Bitcoin but if they were already sold on bitcoin and understood the concept he was much more easily able to get them over the hump so you want to be finding people that you don't have to sell on

both the category and your company ideally they'll already be excited about the category and you can focus exclusively on selling your company so in order to make all of this work you're going to do a few things you're going to meet your Idols you're going to use your network for warm introductions and you're going to think about the market timing now um on the network Point obviously cold Outreach can work as well but it's a great opportunity to put um all the relationships that you've spent the last year's building to work so um past colleagues

advisors folks like that it can be great if you start off with a list of people and then ask others to add on to it if there may be folks that you missed um obviously controlling the uh Market is is a little bit outside anyone's powers and if we could all roll back the clock to 2021 I'm sure we'd all go fundraise then but what's really important is that your specific company is well positioned to fundraise when you go out so think about you know do you have the right metrics do you have your financials

buttoned up um do you have good answers and have you thought through the idea Mas before you kick off some of these conversations so take a second to read this quote um from Justin once you've figured out which investors you want to be talking to this is a super critical Pitfall to avoid build it and they will come in my opinion is one of the biggest lies in startups and more experienced Founders often come to this conclusion Having learned this lesson the hard way so what are you thinking about if not just product it's go

to market so figuring out how to effectively distribute your product and making sure that you know what kinds of channels whether that be partners or other kinds of distribution networks you can put to work I know you've heard a lot about that topic from Maggie and Pierce and a few others on the team but I really can't emphasize how important it is um being on the receiving end of a pitch you want to make sure that the founders are not just thinking about a perfect product but that they actually have a plan for how to

get this in front of the Right audience an example from web2 that comes to mind is the great Dropbox Space Race example so um this was something that Dropbox launched in 2012 and you know obviously storage space is not a particularly viral product by nature but they were able to create a program whereby college students were incentivized to sign up when they signed up they got free space um and then they created sort of a competitive element where different colleges can compete with one another and that way um basically generated a viral Loop and that

kicked off a really dramatic bout of growth for uh Dropbox so think about for your company or your network whatever the case may be what can you be doing that's going to be a kind of distribution hack um that's going to help you drive that uh go to market flywheel so we've touched on a few of these points but kind of to sum it up you're going to want to make sure that you understand your Market super well and I really can't stress how important it is to practice out loud before you start pitching now

obviously you don't want to take it to the point where you've got the whole thing memorized and it sounds super stilted but you will absolutely kind of come up with more concise way of saying things just be more confident in your delivery if you practice in front of a mirror with other um friends or advisors and all of that effort will will certainly serve you well once you get to talking to actual investors um you're also going to want to make sure to tailor your deck to help investors see how you tie into their investment

thesis and how you connect with their existing portfolio so you really want to make it easy for them to imagine you fitting into their existing portfolio now this is a question that I I highly recommend having an answer prepared for because you're almost certainly going to ask it uh get asked it by a lot of VCS I certainly ask it a lot myself um so really think about what you are looking for aside from money from your investors now the most exciting part the pitch itself um before we get into kind of the the meat

of it I think it's helpful to cover a few logistical items and if these sound self-explanatory to you that's great but I assure you I have seen all manner of these gone wrong so I think still useful to kind of some sum them up first off you want to make sure that people can actually see you and that your camera is on and that you don't look like you're in the witness protection program so make sure that you are visible and understandable energy is critical investors are really going to be mirroring your energy so if

you seem like you're bored talking about your own company or project it's really unlikely that you're going to be able to get an investor sufficiently excited now obviously you want the enthusiasm to be genuine and authentic but I'm sure each of you is really excited about what you're building so that shouldn't be hard to do so just make sure that the energy is there and that you're conveying that appropriately to the investor I also want to make sure that you're speaking clearly and obviously don't be late that one's hopefully pretty straightforward and lastly remember that

this is a dialogue so if you start to see that your audience is drifting um that people are not paying as much attention as you'd like it might be a good time to ask a question and make sure that you're reeling them back in um certainly better to have a conversation than a monologue so um much more likely to to result in a positive outcome for you now getting into the substance of the actual conversation you're going to want to make sure to tell a story and I really can't emphasize enough how important that is

because it's your narrative it's your opportunity to really explain how you got here and what you're looking to build and it's also critical as you're thinking as you're walking through the pitch that you make sure to connect the dots for the investor now obviously this is very um clear to you because you it's your story you understand it super well but you want to make sure that you're conveying the domain expertise you're also showing how your background feeds into that and you're explaining to the investor what motivates you to take this company or Network all

the way and doing this before you actually get into the substance of a pitch is a great way to get their attention going from uh the first moment so once you've gotten to the point of negotiation this is certainly a great spot to be in um not being an sounds like it it should be pretty straightforward and very um obvious so I won't say much about it but I do think it's important to note that investors generally have a lot more experience negotiating than you do because we do it all day so um make sure

not to come across as overly aggressive as that can be really off-putting on the receiving end um you can be firm and you can be you know hold the line if you have a price in mind but make sure that you are maintaining a professional demeanor and you know a certain politeness as you um kind of work through the process with the investor so in terms of setting price um now if you're Jeff Bezos today raising for your new company after Amazon you can inevitably name your own price but if you are Jeff Bezos raising

the seed round of Amazon which is more where you guys are at right now um then figuring out what the right price is is really going to be a conversation with the lead investor so um you want to make sure that you are not sort of um painting yourself into a corner by setting a price that's not going to be market clearing and I think that is honestly particularly important in a market environment that's a little bit less favorable so um certainly good to keep that in mind in in any Market though um generating momentum

is really the name of the game here so as soon as you're able to generate one offer it's going to be a lot easier for you to generate several you want to be able to basically create fomo and excitement without being misleading about where you are um in the process uh a lead investor is also going to really be the Cornerstone of your round and sort of help you put together the rest of the round so prioritizing folks who will actually lead um is very important as you think about putting together the round itself okay

so coming out of the pitch you need to continue to do your homework and follow up so that you can actually choose the best partner obviously we touched on negotiating um persistence is also really the name of the game here so making sure that you can time box your negotiations in such a way that you don't let them drag on and you can actually keep the process rolling um getting a good lawyer I really can't stress how important this is um it sounds like a cheap lawyer might be good it's cheap right um but no

you will pay for it later and it can end up being extremely expensive so I really highly recommend finding council who has experience in startups and specifically in web 3 um because it's it's really going to serve you well in the long term and then in the same way that investors will do a reference check on you it's a great idea to do reference checks on them so you might ask them for a few names and contact information of CEOs that they've backed previously I always think it's a great idea to say um to ask

for both success cases and not success cases because it's great to to know that your investor is going to be supportive if you you know kill it and end up being the next big thing but it's also helpful to know who's going to be there for you when uh you know if you end up struggling at any point so uh definitely good to do reference checks as I mentioned you can ask directly to the investor but also helpful to do background ones where you might um you know back Channel and find find folks that they

didn't refer you to all right so we've looked at how to come up with your story how to frame your deck how to successfully manage investor conversations and now we're at the Finish Line exciting congratulations you get to close the deal however bad news for you um you're not really done so this is the phase in which you get to have a little bit of role reversal with your investor and basically put them to work as you transition from uh pitching to being a portfolio company an important part of that transition is a little bit

of a um demeanor shift so obviously you've just spent weeks and weeks telling the investors how you're so amazing and you're going to be the next huge success um now you want to be a little bit less um you know a little bit less confident and maybe a little bit more authentic about the areas where you're struggling and the reason this is so important is because as you think about how to successfully manage a relationship with your investor you want to make sure that you are never surprising them I think a frequent dialogue bad news

coming early is absolutely the right way to manage this relationship I think on the engagement Point um I personally do monthly check-ins with each of my companies and I find that these are most productive when the founder brings in specific challenges or areas in which they're struggling so for example we're trying to get a connection with a specific partner and we're not finding it or we're getting blocked on the App Store and these are all things that your investors should be able to put their network to use for um and help you sort out so

on the talent side I think the first hires of any company really set the tone for what the um hiring bar for that company is going to be going forward so this is another great place to put your investors to work um obviously if they're specialized in the area that you are building in which is what we hope they should have a really robust network of people who they can tap to potentially become um you know your your next set of new employees so that is another super high leverage way to specifically put your investors

to work now all of that said it's really critical to remember that this is a marathon and not a Sprint um this is going to be a very long-term relationship they sometimes say that it's you know getting an investor is like a marriage except worse because you can't get a divorce um so hopefully you guys all end up having amazing relationships but it's great to really go into it thinking that this is a long-term thing and you want to build the right rapport with your partner right as you get started so for those of you

who already have a deck see if you can apply these principles to it and if you don't start from the beginning and use this as a road map hopefully there's a path forward to a successful fundraise here now that doesn't feel like chewing glass for you guys and now I will open it up for questions hey aarona this is Jess from blockers thanks for the talk actually really uh Hands-On really really relevant really really hopeful really appreciate that um I think just a question for you without naming names who was your favorite founder and what

was the most memorable moment for you oh geez without naming names who that's a hard one to quote you can't you can name names I'm just not forcing you to well let's see um hard to pick favorites but I I will tell you about a very memorable pitch um which was the first conversation I ever had with Anton from Talos um he so first of all to set the stage there's a bit of a personal story I had a migraine that day I I was really not feeling well I literally almost canceled the meeting which

I try never to do but I was really feeling poorly um but I heard that he had I was living in San Francisco at the time and I heard heard that he had flown all this way um and so I was like oh fine I'll I'll pull myself together so I meet him and I mean it was just Charisma out the Wazoo incredibly um thoughtful answers really passionate and absolutely going to run through walls in order to make his company successful it was very apparent to me from the first conversation um and I think it's

really you know it's really what I was saying earlier having both deep domain expertise he had spent years and years and years in traditional Capital markets building the exact kind of financial infrastructure that he wanted to now build um in crypto so he checked the um the founder market fit box super well and then also there was just this energy this enthusiasm this willingness to do anything to make this company work and I think he conveyed that extremely well um and by the way I think my my first impression was very right he's gone on

to to build an amazing business over the five or so years that I've known him now so um I think try to really channel that energy because um clearly it's it's memorable of it I'm talking about it a few years later yeah awesome so founder markific being uh willing to run through walls and Charisma is the name of the game got it exactly exactly uh Jay from ethanid uh just actually took my question that was I was just gonna ask about like um what were um uh your favorite pitches that um another one that you

can pick out that well um that was certainly one let's see about another one um well I I distinctly remember a pitch that I had I took with um Cara and Elena who you've met um probably on the deal team and this was um the first pitch with Janine from every realm and um Elena had such a good phrase to describe it it's escaping me but it was she just really had she was so crisp in her delivery so confident um had clearly really thought deeply about the uh idea maze she's building in the metaverse

space and had really thought about it from both the traditional and a web 3 native perspective um we we all came away oh Elena said she was wildly impressive and I think that was really an excellent way of summing up that conversation so um again you really want to project confidence and the fact that you understand your domain space which is exactly what she did ah I see uh thank you uh and and the second question is more tactical uh concerning um with demo day and how would you recommend strategizing or planning that out post

demo day I'm sorry can you repeat that I couldn't hear the second part so uh how do you plan on strategizing out the process post demo day uh like after we do demo day we have inbound uh investment requests or uh inbound calls for Investments yeah yeah absolutely um so I think you want to follow a lot of the same principles that we went through this way um I think it's going to be important to make sure that you're kind of trying to time box the negotiation so don't schedule a call now and then for

three weeks out because that's going to be difficult to do it try to really compress the timeline and for example if an investor tries to schedule three weeks out try to push back a little bit and say Hey you know we're we're expecting to wrap up the process a little sooner might you have any availability before then and oftentimes they will make an effort to kind of rework their calendar and and meet sooner so I think that's definitely an important part of the the step um I would also kind of do a bit of a

stack ranking of who you're most excited about and who is likely um or who can lead so that you're prioritizing those conversations as I was saying earlier um and um yeah I think really a lot of the principles that we kind of ran through apply here it's just that process happening after demo day rather than without a demo day thank you hi I'm Marielle from mentorport's great talk I have a question regarded regarding traction and like the stage of where we are at like very early stage companies what would be your definition on like good

traction sure so obviously this depends and it's important to keep in mind that that tricks uh lots of metrics so that metrics are not by any means the single determining factor of a given fundraise I think it really depends what your key metric is so I would spend time thinking about okay what is the number one most important metric of the health of this business um or network and try to have in an ideal world you would have a couple of months of at least 20 month over month growth for that key metric now obviously

that might not be possible if you're you know you've literally just launched you might only have a couple weeks of data um but I think in in a perfect world that's what you would want to see thank you awesome well please join me in thanking Ariana Simpson for that great talk thank you Ariana [Music] thank you foreign