For startup founders, knowing how to pitch to VCs successfully can be a necessity for business growth. Venture capital is the primary financial driver behind startups in almost every industry and vertical.

In 2021, a record US$329.6 billion in investments was raised across more than 17,000 deals. This was nearly double the record set the previous year, which represents the massive growth in volume of VC capital in the startup ecosystem. VC funding reached a peak of US$70 billion in November 2021, but 2022 saw a downward trend in VC funding month-on-month. As with all aspects of the economy, conditions in the VC world are constantly changing, and the trends governing venture capital are subject to countless variables.

Whether or not companies receive VC funding to operate and scale is highly dependent on what happens during pitch meetings. As a founder, your challenge is to convince investors that you and your business are an excellent investment.

Here are 13 best practices for how to present to venture capitalists.

Explain the opportunity in the first five minutes

The first rule of how to pitch to VCs is to make sure that you emphasise the most important information. Within the first few minutes of your pitch, your audience should have a clear idea of what the opportunity is and how you plan to take advantage of it. You'll have plenty of time to go into more detail during the rest of your pitch. If you can't tell investors why you are seeking funding, what you'll do with it and why they should trust you to make their investment grow, you need to spend more time preparing your pitch.

Make your pitch interactive

Find natural points in your pitch to pause and ask questions such as, "Is this all making sense?" or "Do you have any questions so far?". When doing VC pitching, give your audience a chance to chime in with questions as the pitch unfolds, even if the structure of the meeting allows for questions and answers at the end.

Avoid reading from your deck

Your deck is a visual aid to help you with your pitch – it is not the pitch itself. Investors are looking for proof that you really know your business and the market that you're addressing. Though it can feel counterintuitive, investors don't need to see that you have an incredible deck, so avoid using your slides as a crutch in the meeting. For a deeper understanding of how to craft a successful pitch deck, see our guide on this topic.

Make the meeting into a mutual evaluation

Questions such as, "What type of relationship do you typically like to have with founders?" and "What are your biggest investment goals for this year?" make it clear that you are interested in more than someone who is willing to write a cheque. You should be looking for investors who genuinely align with your business and share your vision for working together.

Brag about your team

VCs don't just care about you, your ideas and your market, they want to see that your team is capable of executing your vision. Promote your people and make the VCs in the room feel as excited about them as you are. As a founder, the ability to build and maintain a solid team is arguably the most important skill you can show to investors when doing VC pitching.

Be big, bold and ambitious in your view of the future

Being a founder means having a bold vision that's grounded – not hindered – by practical decision-making. You can expect VCs to ask detailed questions about what you're doing and how you plan to achieve your goals. What they might not ask about is the big picture. But being proactive and laying out your vision for the future, backed up with an actionable plan is an important part of how to present to venture capitalists.

Be specific about your potential market

Your vision might be substantial, but your understanding of the market opportunity must remain detailed and specific. Two of the worst things that you can say when doing VC pitching are "Everyone is going to buy this" or "Our target market is everyone with a computer". Saying that you're "going after everyone" means that your plan is not fleshed out and is not a good example of how to pitch to VCs. VCs will notice this. It's important to show that you have thought through which segment of the total market is right for your company, and that you have a plan to capture it.

Know who your competition is, as well as what sets you apart

A competitive analysis is an important component of every pitch. If you don't know who your competitors are, you probably won't be able to compete against them effectively. When doing VC pitching, be prepared to speak to your audiences about your competitors from an informed position.

Admit what you do not know

There's nothing wrong with answering a question by saying, "That's a great question. Let me think about it and follow up with you." VCs don't expect you to have all the answers. Letting them see your thought process is not a bad thing and is an important part of how to present to venture capitalists. This will lend you more credibility than attempting to answer every question on the spot, whether or not you are prepared.

Do plenty of practice

When thinking about how to present to venture capitalists, ideally, you should practise your pitch in front of people who have experience of both giving and fielding investor pitches. However, even practising with your flatmate, partner, relative or a friend will suffice. The key is to put in the necessary time, practising your pitch out loud several times before taking any investor meetings.

Speak clearly about money

You should know exactly how much money you're trying to raise, what you'll use it for and what it will do for the business. To do this, you need to have a very clear understanding of your business finances. An important part of how to pitch to VCs is to address the subject of money directly – nothing is more off-putting to VCs than a founder who is hesitant or unclear about the funding they need.

Keep your deck short and to the point

Don't focus on creating the perfect 40-slide deck that takes three months to prepare with a team of copywriters and designers. Instead, keep it short and to the point. Including only the key information that you want investors to have to hand when they're reviewing it after your presentation is a key part of how to present to venture capitalists. More than 15 slides is probably too much detail for a pitch deck.

Have other asks besides money

Money isn't the only resource that investors can offer. Do your research on every individual investor that you meet and decide what else they have that might be valuable to you. Could they introduce you to other companies in their portfolio that might be beneficial to your business? Is there someone in their network who could be a great mentor to you? Do they know someone who you've always wanted to go for a coffee with? Do they run an annual conference that you could be a part of?

Avoid walking into a pitch meeting with a list of demands. When thinking about how to pitch to VCs, approach these meetings as if they are part of an ongoing relationship, rather than a one-off transaction. Even if a particular VC doesn't want to join your latest fundraising round, you might still walk away with something deeply meaningful and valuable.