Entrepreneur Office Hours - Issue #155
The way you've been taught to give a fundraising pitch is wrong
I’ve given hundreds of fundraising pitches. Even though pitching my startups rarely ended well, I almost always enjoyed the actual pitch experiences as they were happening. After all, pitching my startup to potential investors always meant I was discussing startups with other people who were equally interested in the topic of entrepreneurship, making the experience akin to talking about your favorite sport with a fellow fan. Even if the two of you don’t agree on the best teams and players, you still enjoy the conversation, right?
Heck, I still love discussing entrepreneurship with anyone willing to listen, as evidenced by the sentence you’re currently reading.
However, despite my love of pitching, I hate the kinds of fundraising pitches every entrepreneur is taught to give. You know the ones I mean… the ones where you build a pretty slide deck with a problem slide and a solution slide and a competition slide and a team slide and blah, blah, blah, blech… what a waste of everyone’s time. I’ll let you read the article below to understand why.
The reason I wrote the article is simple: after you’ve read it, hopefully you’ll be convinced that the way you’ve been taught to pitch is 100% wrong. Instead of dancing around in front of a ridiculous set of slides, maybe you’ll try having a real conversation with an investor. I promise it’s a much better way to fundraise.
The typical structure for pitch decks doesn’t make any sense, and you’ll feel like the backside of a horse once you realize how silly you’ve looked pitching the same way as everyone else.
If you’ve ever been in a toxic relationship, then you know what it’s like to be a startup founder. So why do we all keep going back for more?
Office Hours Q&A
Hi there, Aaron!
I have more of a thought than a question. My brother is a real estate agent in a market that is very hot. He keeps posting all over Facebook about how great of an agent he is and how quickly his houses are selling. Anytime I see those posts I laugh because of course he can sell houses fast. My dog could sell houses fast in this market!
So it got me thinking that maybe things like skill and talent, which are things I have always focused on, really are not as important as anyone thinks. Instead, it is all about finding a hot market. Any thoughts on that? Have I been focusing on the wrong thing all these years? Should I be more like my brother and trying to sell houses in a market where even my dog could close deals?
The short answer is YES!
That’s probably the long answer, too, but I’d feel like I was somehow cheating everyone reading this answer if I left it at that.
What you’re identifying here is basic economics. Supply and demand, right? In a market with very little supply and huge demand, everything that makes building companies hard becomes much easier when potential customers will do all the work for you. They chase you. They offer top dollar. They won’t ask for anything that might cause additional burden in fear of losing the opportunity. And so on.
In that kind of market, yes… your dog could sell a house if it was legally and physiologically possible. And, yes, finding that kind of market is a great idea.
But, in the startup world, it’s also mostly an impossible strategy. Yes, those markets do appear from time to time. The early days of the Web had lots of them. We’ve seen some echoes of it in crypto. But, by the time most of us realize markets are ridiculously hot, it’s too late to capitalize on them.
In other words, while I agree with you in principle, I wouldn’t stop betting on skill and talent. As your brother is going to learn, every market eventually cools down, and skill and talent are always important.
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!