4 Ways to Sell Your Product Like You’re Pitching to a VC

 

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Photo CC: Steve Jurvetson

Several members of our team have been through the venture capitalist pitching process. All told, we have pitched for 8 different companies over the years, and what we’ve found is that there are a lot of similarities between pitching to VC’s and selling your product to prospects. So we’ve decided to use some of our tactics and approach to pitching VC’s in our sales processes, and vice versa.  Here are 4 things we have found:

1. Pitch The Right People

In the venture capital world, there are countless types of firms. Firms can specialize in mobile technology, SaaS and infrastructure, hardware, social applications, or any number of industries and sectors. Most firms will do a combination of two or three, with only a few that have the capital and capacity to do all of them. One mistake many startups make is that they believe every firm can be an investor, which is simply not true. The first step for a startup raising capital is to research and identify which firms are even worth the time talking to.

 

When selling your product, the same principle applies. You should be targeting specific types of prospects, and not selling to just anybody who picks up the phone. Often as startups, you tend to believe that any business in the world is a customer. Instead, focus on those customers that sit firmly in your wheelhouse, and pursue them with a laser focus. When you have exhausted that vertical, then you should branch out to other verticals.

2. Know The Checklist

Every venture capital firm has an investment thesis and guidelines that dictate what markets and types of companies a firm will and will not invest in. To ensure the firm stays within their thesis, VC’s have their very first filter – a checklist. They’ll have 5-7 items that you have to check off before they’ll even consider meeting with you. So as you are raising venture capital money, you have to research a firm and guess what their checklist looks like. With this knowledge, you can single out the firms that are the right fit, and save everybody time.

Similarly, when selling your product, the person you talk to is going to have a checklist that they have to check off so they know that your product is worth investigating. While the list may not be as broad as a VC’s, things like ROI, key differentiators to alternatives in the market, cost, implementation burden, and adoption pain are examples of the factors that will go into your prospects’ checklist.

3. Tell The Story

I once had a VC at a very prominent silicon valley firm tell me over lunch, “we invest in the story and the storytellers, not the company or the idea.” Every VC wants to hear the story of how your company was started, by whom, great wins, bitter losses, and what you are doing to build a great company moving forward. A great fundraiser is a great storyteller, and one of the best books on storytelling is Joseph Campbell’s The Hero with a Thousand Faces. This book was one of George Lucas’s major inspirations as he wrote and made Star Wars. It outlines all the different types of stories that we tell, and when the best times to use them are.

Selling your product is really an exercise in storytelling. You are telling the story of why your product exists, how it solves a problem in the world, and how a prospect can be a part of the story. One method that works really well for us at CONSENSUS is telling the user case story. In it, we help the prospect grasp the current reality of what is going on in their organization, and then help them visualize what their world will look like with CONSENSUS™ in it. This approach has proven very successful for us in both investor pitches and sales calls alike.

4. Move to Close Early

One of the oldest – and most obnoxious – investor tactics is to throw you into VC limbo. They won’t say yes but they won’t say no, they’ll respond to emails but show no movement, and generally just waste your time. They do this to keep their options open and to see how the rest of the capital market reacts to your company. Early on when we found ourselves in VC limbo we would continue to fruitlessly pursue these investors. Then, we switched tactics and began to ask closing conversation questions after the first call or meeting to see if pursuing that investor was worth our time.

Many sales organizations wait way too long to ask closing questions, and when they do they aren’t sure if the answers are going to be yes or no. That’s why you should start asking closing questions right at the very beginning. By doing so, you will be able to move prospects through the sales process much quicker, and as a salesperson you’ll have a better idea of where a prospect stands from a quality and probability perspective. It’s never too early to start closing the sale!

These are some of the correlations we have found between pitching investors and sales. We’d love to hear your thoughts as well!

For more great content, check out:

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