November 30, 2020

Experts say the perfect VC pitch highlights plans to thwart copycats

  • Despite the pandemic, there’s still VC funding available to startups. However, early-stage companies are facing stiff competition in today’s  market. To score an investment, founders must nail their pitch. 
  • Betsy Bluestone, of Procter & Gamble’s internal studio that partners with startups, and Vanessa Dawson, founder of funding platform Vinetta Project, told Business Insider the five ways to perfect a VC pitch.
  • Small business owners must have a solid team, data to back up their claims, and protection of their ideas.
  • Visit Business Insider’s homepage for more stories.

The coronavirus pandemic has severely altered the state of business for many founders, but one thing hasn’t changed: There’s venture capital money up for grabs.

As of June 30, $69.1 billion in VC money has been allocated, which is a strong start for the year, according to data and research firm Pitchbook. However, the number of companies receiving VC funds for the first time has fallen sharply. 

In order to stand out in a crowded market and score the funding you need, founders must nail their pitch to VC firms. Experts Betsy Bluestone and Vanessa Dawson said, in addition to the standards such as knowing your numbers and proof of concept, they want to see who’s on your team and how you’re protecting future growth. 

Bluestone is the director of scouting and partnerships for P&G Ventures, which is an internal Procter & Gamble studio that partners with startups to build businesses within the consumer packaged goods industry. Dawson is the founder and CEO of the Vinetta Project, a platform that works to close the funding gap for female founders. The duo — who’s companies have partnered to scale more women-owned businesses — offered their 5 tips for nailing a VC pitch. 

1. Highlight relevant market opportunities 

Founders who identify how their businesses will address major market opportunities pique the interest of Dawson. Entrepreneurs must identify the large population they hope to help and show Dawson how they will execute on those plans. Dawson wants to help companies become global brands, but in order for that happen, there needs to be room for wide-reaching growth. 

2. Explain why your’s is a “no trade off” product

Both Dawson and Bluestone are eagerly looking for companies with “no trade off,” meaning consumers get what they want without having to sacrifice something in return. For example, consumers want to keep their homes clean but don’t want to use chemicals that can add to the increase in antibiotic-resistant bugs.

“How are you producing opportunities and products that service the customer without a trade off?” Dawson asked. “I call it a triple bottom line: What’s positive for the environment, health, and all other things?” 

3. Build strong teams to make up for a lack of data

When Dawson meets with founders in their earlier stages of growth, who are often lacking metrics due to their infancy, she studies the companies’ teams. She looks at founders to gauge their level of expertise and insight into the market they’re entering. Dawson also wants to know who they’ve chosen to work with and who they’ve built into their network. 

4. Show proof that customers benefit

For Bluestone, a company’s pitch must show how its product or technology is superior. This includes efficacy data that proves how the startup is helping customers.

“We want to see noticeable consumer benefits,” Bluestone said. “We also want to see it’s changing the issue it’s trying to solve.” 

5. Have a plan to protect your product from copycats

Bluestone wants to see how early-stage companies are protecting their ideas and planning on scaling into a global brand. For instance, it’s important that businesses have intellectual property, patents, or trade secrets that keeps “others from copying or following a technology,” Bluestone said. It’s vital startups show how they are protecting their unique idea so that another entrepreneur can’t easily copy it. 

 

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