The Power of Leaving Things Out of Your Pitch
By Alan Jones
One of the hard things about pulling off a great startup pitch is doing it in the allotted time. Another challenge is making your pitch more of a story with a narrative arc than a series of facts about total addressable market, pricing and team members. Maybe you should consider deliberately leaving something out. Obviously leaving something out could make your pitch shorter, but maybe it could also make it more interesting, and help you tell a more engaging story. I’ll explain why.
Founders sometimes load their pitch script with every answer to every question they fear an investor might ask. I understand why because I make the same mistake myself: if I show this isn’t just a half-thought-through pipedream, maybe I can win their confidence; or if I can successfully anticipate all their questions, maybe they won’t ask me any and we can skip straight to the part where we discuss how much they’d like to invest in my venture.
Thinking like that forgets two fundamental forces at play in pitching:
- Investors actually want to ask you some questions; and
- The goal of a pitch is to just get to the next stage of the conversation, not to seal the deal.
I can clearly remember the only time in my investing career that I decided to invest in a startup based on the founder’s first pitch to me. In more than 20 investments I’ve only ever done that once.
Many investors get some satisfaction out of asking a good question in front of an audience of their peers, whether that’s in a big room at a demo day event or across the coffee table with another partner at the firm. Even if it’s just you and the investor at the coffee table, they still want to ask smart questions of you, to help establish their preferred power dynamic in the investment negotiations.
The investor determined to ask a question has only one option — to think harder about a less obvious question to ask you. Whatever they ask is unlikely to be something you have a ready answer for. You risk having to think on your feet, to reach for facts or numbers you might not have in the back of your head. You risk becoming what you fear — someone without all the answers.
You can satisfy their need to ask an intelligent question while guarding against unexpected questions in one easy step: deliberately leave some obvious things out of your pitch.
They are now highly likely to ask you those questions, and you have between now and pitch day to optimise your answers.
I recommend you also remember my favourite motto: “we get the behaviour we reward”. The best way to reward the investor’s question is to tell them they are clever. Not literally in those words, but begin your answer with a little compliment, like, “That’s a great question” or “that’s a very good point” before beginning your answer. Dopamine is released, investor feels clever, and you are on your way to success.
Which, in this context, is just to get to the next step in the investor negotiation process. The next step could be to meet again for coffee later in the week, or to meet another partner at the fund, or to send come back with some additional metrics or references.
Because although popular legend has it that investors rush forward with open chequebooks in Silicon Valley, there’s no such thing in Australia. Investment moves at a slower, more cautious pace.
The only investor I know of who has decided to invest in a startup at the end of the very first pitch is me. Of the more than 20 investments I’ve made in startups, I only did it once. And while I’m very happy with the progress of that investment, I don’t do that anymore.
Once you accept that your goal is merely to get the next meeting or to supply further information, it’s so much easier to craft a tight pitch script and deck. And once the pitch is delivered, it’s so much easier to have an interesting conversation with an investor if you have left them with some obvious questions to ask, and have great answers ready and waiting in your back pocket.