Got a great question from a reader wondering if it’s better to pitch investors remotely using something like Zoom, or, if possible, should you give your pitch in-person. I immediately knew my answer: in-person, of course! But then I thought about the question for a few more minutes and realized I was completely wrong. You’ll find out why in the Q&A at the end of this issue.
Before you get there, you’ll find out why early-stage VCs invest in startups rather than businesses. And then you’ll find out why being a frugal entrepreneur could be worse than you realize.
Lots of things to find out, huh? I’ll let you get to it. But, before you do, just remember to press this big, orange button:
If you’re struggling to raise an early round of venture capital, it could be because you’re pitching the wrong kind of opportunity.
In the early days of a startup, entrepreneurs usually have to be frugal. But can being too frugal kill your company? It certainly caused problems for me.
Office Hours Q&A
Thanks to COVID-19, people are much more willing to have remote meetings. Specifically, I’ve had lots more video pitches with investors rather than in-person pitches.
Do you think this is a good thing? If given the option, would you push for an in-person pitch or a video pitch? And why?
Yes, investors (and just about everyone) are much more comfortable with video meetings. From an “access” perspective, I think this is great. It helps level the playing field for entrepreneurs who aren’t living in investor hotspots, at least in terms of being able to have fundraising conversations.
To be clear, investors often still favor investing in companies located in certain geographic areas, but COVID might even be helping with that, too. I’ve certainly noticed more VCs being able to appreciate the efficiencies of remote teams without worrying so much about whether being in different locations would ultimately hurt the company.
For the record, my last startup was mostly remote. And, yes, it did create concerns from investors. I’m pretty sure it cost us a few opportunities.
As for whether remote meetings or in-person meetings are better, I’m tempted to tell you that in-person meetings are always better simply because they enable better, clearer, and more personalized communication. Those are good things when fundraising. Heck, those are pretty much always good things during any conversation.
However, upon further reflection, my answer has two problems:
Problem #1: I’m just giving you my opinion. I personally prefer in-person meetings, but that doesn’t mean they’re everyone’s preference. I’m sure some people (including VCs) prefer video meetings.
Problem #2: It’s probably a response to the wrong question.
Fundamentally, asking whether a remote pitch or an in-person pitch is better removes the focus from what truly matters, which is whether you have an investable company. If you have an investable company that aligns with an investor’s investment thesis, meeting remotely or in-person doesn’t matter.
In other words, focus on finding the right investors for the company you’re pitching, and focus on conveying the right information to those investors. Those are the things that will help you raise capital, and they matter a lot more than whether the pitch is in-person or online.
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!