Why You Should NOT Pitch

I’ve been meaning to write this for a while after meeting with many smart entrepreneurs. And I’ve seen a lot of pitches.

On a very high level, startup pitch can be mostly break into two axises — 1) content/ facts (what to pitch) and 2) approach (how to pitch). Let’s talk about the later part, the how.

I was meeting this one entrepreneur — let’s call him Alex. At the end of the pitch, he kindly asked for my feedback and how he can improve. I loved that. So many founders focus on the notion that fundraising is just selling hard but often forget — more importantly, its about building relationship, building trust with a good investor who you are going to work with for the next 5 years, if not more. Because of that, I told him —

Never pitch. But do onboard your investor as your co-founder.

And Alex’s response was — “ Wow, this totally change my mentality for fundraising.” So I thought to write a post to explain.

I’ve had the fortune to sit down and chat with Hans Tung from GGV Capital last month and we talked about how he would characterize the best VCs founders should be working with. His response was — “ a lot of people focus on the brand name firm, which is helpful for recruiting… that I get. But more importantly a good entrepreneur shouldn't just take money from anybody…” That’s where relationships come in.

http://www.youtube.com/watch?v=4S3Wti1KWyA&feature=youtu.be

Alfred Lin from Sequoia Capital also has this famous question — “who is your worst reference and what would they say about you” — the bottom of it is to really see if the entrepreneurs are genius enough to co-cultivate a trust worthy relationship.

The key word here is — trust. Obviously it goes both side, but when a founder first met a VC for fundraising purpose, what should she do to build that trust?

The answer does not have to be complicated — simply see your potential investor as your potential co-founder. This requires a rather big mentality shift as it requires *full transparency, trust and good chemistry* on both sides. It asks you to see investors not just investors nor partners, but most importantly, your theoretical co-founders.

Think about it for a second.

If you are looking for your long term co-founders, you *naturally* don’t want any surprise, you would *naturally* talk about your real challenges and your excitement… Why would you want to settle for less when it comes to investors? Interestingly, that’s usually what investors are looking for at the pitch meeting — an candid discussion about an fast-growing business and its challenges.

So, never pitch — let alone trying to sell hard to your investors. PG wrote this article which I admire. Paul has a very sharp observation to advice founders: when pitching VCs, founders should simply tell the truth. Don’t pitch. Tell the truth — much the same way how you would onboard your co-founders.

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