Every week, venture capital investors receive hundreds of visually impeccable presentations that promise to change the world. Still, less than 3% of these pitches get funding.
The five of us recently analyzed all written proposals sent to Creative Destruction Lab (CDL), a global acceleration program between 2012 and 2019 – a total of 5,334. We start from the hypothesis, based on years of research on entrepreneurial signs and rhetoricals, that pitches emphasize some combination of two attractive elements: the “steak” (ie, the “crumb” of the pitch, including invested capital, patents, the founders’ experience, among others) and the “seasoning” (the style, the enthusiasm demonstrated by the founder through words through words of high impact such as “impressive”, “convincing” and “vibrant”, and the concrete evidenced by tangible and specific terms such as “dollar”, “company” and “buyer”). Then we crossed this linguistic “fingerprint” with panel acceptance decisions.
We find that founders can dramatically improve their chances by simply by aligning their words to force the evidence they present.
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Next, four evidence -based rules derived from this insight.
Analyze your “steak” before placing the seasoning
Founders tend to want to compensate scarce resources with passionate and exuberant rhetoric. This is a mistake. When the “steak” is thin, an excessively intense and emotional language reduces the chances of acceptance by about thirteen percentage points.
So first, map what you have already achieved in four categories – financial, social, human and intellectual capital – and evaluate how robust they really are. If you can’t point at least one significant check, you have few resources. Write your pitch according to.
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Times with little steak must maintain cold and specific language. In the group of 5% with weaker signs, exchange abstract statements for concrete words increased the chances of acceptance in up to six percentage points in our research. Small concrete facts or short citations of clients with tangible results, presented directly, surpass pages of flowery and excessively confident stories.
Leave the “steak” chiar – but maintain the abstraction
Ironically, when you have real traction, investors expect to feel your enthusiasm. But what can harm in these cases is to be excessively concrete. Specifying too much short -term goals weakens the credibility of the broad view. Instead, highlighting scalable horizons: Think big, with future vision. Paint a plausible but comprehensive map of the market you intend to master.
Why does the balance between “steak” and “spice” work?
Investors of Venture Capital see many persuasion attempts and are used to the high risk – over time, they develop the ability to make this type judgment and form well -defined expectations. In the difficult search for the next unicorn, they trust the “instinct” – a combination of intuition and detection of solid signals of substance.
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Building a company is difficult enough; Creating a persuasive pitch should not make it more complicated. Start with an honest assessment of your achievements so far and then apply the right combination of persuasive style elements. When the ingredients align, investors stop looking for failures and start asking how they can help. And that’s where the real conversation – and the investment – start.
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