Last month I had the pleasure of judging the USAA Venture Pitch competition that was hosted in concert with Bunker Labs, an accelerator that focuses on military veteran founders. I spent the evening in DC with the founders, and then took the pitches the next morning — and I was very aware of something that Margaret and I have talked about as it pertains to meeting founders for the first time. There is a very strange power dynamic — and most of the time, the entrepreneurs are clearly trying to impress, but also perhaps nervous and uncomfortable — as any of us are when we’re in the room with folks who have an ability to (potentially) change our lives with a decision — in this case, to fund a company that likely badly needs money). I remember exactly what that feels like — and in all reality, I still feel that when I’m on the other side of pitching a potential LP about Squadra.
For these founders, Squadra’s decision feels very binary. Success or failure. Live or die. The challenge is that I’m trying to figure out what they are really like as humans and company builders — and so I’m just increasingly aware of how important it is to get through the facade as quickly as possible, and I believe it starts with us expressing humility and encouraging a real conversation. My advice for founders is to simply be authentic, precise, and real — and just explain what you’re doing — but that’s easier said than done.
The next day was an awesome day, but I felt that none of the pitches truly hit the mark. Thus, I’d like to share a few words with founders about what we’re really looking for when entrepreneurs pitch their company.
- First, we’re looking for a rational argument that explains what problem you’re solving, who exactly is the customer/payer, how (and how much) value gets created for them, and what it costs you to deliver that capability in the short and long run.
- We want to know how you’re going to bring it to market, how it will be priced, and what the longer term (3–5 years) and shorter term (think 12–24 month) revenue potential is.
- We want to understand what the customer’s alternative is — and what features/capabilities you bring that both differentiate and create that important moat.
- We want to know why you’re the team to do this — and how the team will evolve.
- Finally, we want to explore how our money and our efforts can help — and be able to understand the proposed terms so that we can model out success. Major plus if you’ve got traction, and we can talk to customers and prospects.
You should be able to get through this in 5 minutes (10 max!) — practice that!
Think of this as a collection of sentences that form the core of an argument, and each sentence certainly can be expanded on its own — but get through this quickly. Too many founders waste *so* much time on 1) the tech, 2) their backgrounds (that don’t map to their ability to dominate this particular problem), 3) the bigness of the overall market (beyond what they can even actually achieve), and they never address what I simply like to call the “plan” and the path to maturity over the next 24 months.
Rather than treat us as investors, imagine we’re your board (or your own CFO!) — and we asked you to explain to us why we’re spending say $2m on an important project over the next 24 months — and where that would leave us in terms of value creation. That’s your pitch! Keep it logical and precise, and save the rest for follow-on discussions.
All in — I want to sincerely thank the USAA team — Audrey Barrett, Neff Hudson, Steve Harrison — and the Bunker Labs team Haley Chapman, Brittany Burgess, Nick Bradfield, Blake Hogan — that put this event together, the entrepreneurs who shared their companies with us and took the scrutiny head on — including my friends Blake Hall and Kelly Perdew, and my fellow judges Emily McMahan and Vadm John M. Bird!
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