As a VC: The 3 most common pitch mistakes

By Ryan Janssen

I was an investor for 7 years — and now I am a venture-backed founder.

Here are the 3 most common mistakes I see in pitch decks.

1) Not focusing enough on the “Why Now?” question

There are a few crucial questions to answer in a pitch:

• Why is this a big problem?
• Why are we the right team to solve it
• Why now?

Teams usually do a great job addressing the first two, but a subpar job focusing on the last one.

“Why now” might be the most important question because if you don't have a good “why now” in your pitch, the VC is going to be looking at you and thinking, “Is this an important problem?”

→ Why hasn't somebody solved this in the last 30 years of your vertical? 
→ Why is this only being solved now?

So it's either something has changed (technological shift, regulatory shift, etc.) or the problem was just not big enough to merit solving.

2) Underestimating the importance of TAM

TAM = total addressable market. In other words, how many people are out there that are potential customers of your product.

And for whatever reason, it always ends up being thrown into a slide somewhere towards the end or ignored completely.

Why does it matter so much?

VCs are in the business of ‘home runs.’

Their returns are driven by a handful of huge outsized returns.

The only way you can get those outsized returns is with a big enough market.

One of the most important questions that VCs will ask themselves at the pre-seed or seed, they're going to ask themselves:

If they do everything right, can they get there?

3) Founder-Problem Fit

I know. Everyone talks about the importance of having a strong team. But, perhaps that’s for good reason.

Having the right team in place, whether it be founders or other members of the early team, is a major factor that will impact the outcome of your company.

Yet many early stage founders are hesitant to brag about their team in pitch meetings.

Don’t be! Your investors care a lot about this. And in almost every pitch meeting I’ve been in on the investor side, the founder is asked follow up questions about the team and why they are the ones to solve this problem.

So show investors you have the expertise to tackle the specific problem you’re trying to solve.

TLDR:

1) Don’t overlook the ‘Why now?” question.
2) TAM matters, a lot. To be VC-funded you need to have ‘home run’ potential.
3) Brag on your team and your expertise — show investors why you are the group to build your specific company.