Welcome to the Dreamit Dose. Most VC investors see
hundreds if not thousands of startup decks and pitches each year. I've talked to dozens of investors
about the most common mistakes startups make and how to fix them. So here are the top five things
I wish startup founders knew when reaching out, sending a
deck, or pitching a VC like me. Let's dive in. The 1st thing I wish you knew is
that you should start by talking about the big and urgent
problem you're solving. Why? Because out of the gate,
investors like me are in triage mode. Time is valuable, and we're
immediately trying to figure out if this could be something
super interesting or not. It's like how a doctor triages a
patient when they come into the ER. No pulse and the body's cold,
no need to do anything further. In under a minute, that doctor has
assessed that the patient is gone. How does that relate
to VC's and startups? The problem you're solving
is your pulse. And over 50% of startups fail
because they're not solving a big and urgent problem that
customers care about deeply. If you can't convince an investor like me that you're solving something big
and important for customers, that means your startup
probably doesn't have a pulse. And as a side benefit of starting
by defining the problem first, you're putting guardrails in my mind. Investors like me hear so many
ideas and pitches daily. Please help us context switch
and quickly wrap our minds around the problem that you're solving from
the very beginning of our conversation. Next. Investors are always trying to
figure out if and how you're clever on more than one axis. If you don't know what I mean by that, please go watch the
Dreamit Dose on that topic. But the TLDR is, I want to
understand what makes your startup uniquely clever and
hopefully in more than one way. Maybe you're working in an area
ignored overlooked by many because it's boring. You know what,
boring can be great. I may find out that you're
clever because you've come up with a new algorithm,
device, or formula that's truly unique and hopefully
protected by some form of IP. Maybe I'll also learn that
you're clever because you've found a way to grow your
audience and acquire customers at an order of magnitude
lower cost than everyone else. Please keep this in the back of your
mind when you meet with investors. What can you talk about that will
demonstrate that you're clever, and hopefully in more than one way? The 3rd thing I wish you knew
is that you should know a ton about your competitive
landscape and which of your core differentiators
and benefits are truly most important to
your target customers. I see so many startups get
tripped up when it comes to talking about the competition
in detail and why customers will choose their solution. Startups throw up a magic
quadrant and get torn apart when they don't really know
what benefits are most crucial to their target customers, and why
and how they're going to win. When it comes to the competition, I want to figure out if you have
your head stuck in the sand or you really know the
competitive landscape and have a firm grip on
your differentiated benefits. That means I'd better not be
able to do a simple google search and come up with a strong competitor
that you're not even aware of. Next up, I really wish you knew
how much investors want to see that you have a focused,
scalable, and thoughtful go to market strategy. I see so many startups that don't
really even know what that means. Most startups think I'm asking
about their sales strategy. For example, direct, online,
B2C, or B2B. I'm not! I want to understand the key attributes
of great early customers or markets that you're going after, why those
attributes are important to your strategy, and what markets you're
going after in priority order. At the end of the day, it's very
important for investors to understand how you're going to gain
traction quickly and efficiently. Here's the last one. I hate to burst your bubble,
but I wish you knew that the cards are completely stacked against you
when you talk about your projections. Most investors won't believe your
revenue and growth projections as we assume you're guilty
of revenue projection crimes. I would say well over half of startup founders
present highly inaccurate revenue projections. Of course they start with the obligatory,
"By the way, it's important to point out that our revenue projections
are highly conservative." When actually, they're anything but. How do investors figure this out? We start by asking questions
that peel back the layers of your assumptions to see what's
behind your thinking and forecast. Most of the time we find the
emperor has little to no clothes. We ask detailed questions
about your pipeline, sales processes, conversion rates, how
long it takes to close sales, and more. Under this level of scrutiny,
we usually see most startups do a face plant. So, do yourself a favor. Carefully think through each
stage of your sales process and the critical assumptions
you're making along the way. And make sure to work with
someone who will openly challenge your assumptions and
make you defend them in detail. Then redo your bottoms
up sales forecast. That's it. Those are the 5 things VC's
wish startup founders knew before taking their next VC meeting. 1st, start with the big and
urgent problem you're solving. We want to make sure
your startup has a pulse. 2nd, tell us how you're being clever,
hopefully in more than one way. 3rd, know who your competition
is in detail and how you stack up against them from the
customer's perspective. 4th, make sure to have
a go to market strategy that's thought through,
makes sense, and is scalable. And 5th, you need to have solid
revenue projections built bottoms up with pressure tested assumptions. That's it. That's your Dreamit
Dose in about 5 minutes. Please leave your questions in
the comments section. If you like this video,
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go to dreamit.com/dose. See you next time.
