Got a Startup? Research Your Audience Before You Pitch VC

The startup world is incredibly competitive when it comes to finding funding from venture capitalists. These people and their VC firms see hundreds of pitches per year. Anyone who has watched the show Shark Tank realizes that pitching to people who have already made a fortune can be intimidating. The pitches that stand out the most are the ones with the most research as well as confidence. Researching your audience couldn’t be more important whether it is the demographic your company is targeting or the VC investors in the pitch room with you.

Knowing The Demographic Your Startup is Targeting

The truth is that many startups do not have a large amount of sales or data to choose from before pitching to a venture capitalist firm. Those who have had profitable years will have data that can make or break a pitch. The VC firm does not want to hear that you do not know the answer to a specific question. Being as prepared as possible is essential as the people you are talking to are thinking about putting hundreds of thousands or even millions of dollars into your business.

Those companies without large amounts of data will have to find some sort of projections to be considered. Market research companies are made just for that as they can test a demographic when it comes to a product or service. Testing the market is something that everyone at a venture capital firm will want to know before investing.

A focus group to conduct research can deliver quite a bit more information than a simple survey. According to Communications for Research “Unlike surveys, a focus group enables you to dig deep with customers and understand their goals, aspirations, challenges, “pain points”, and other valuable insights. What’s more, this intelligence isn’t just captured by what customers say. Sometimes it’s even more meaningful to note what they do not say, as well as the tone and body language they use.”

Face to face interviews have their pros and cons as well. Watching a person interact with a product or talk about a service can give quite a bit more insight than a simple in-person survey. Bringing in the appropriate number of people for these types of interviews can be crippling to a young startups cash flow though.

Market research companies should be consulted at the beginning of producing a product. This can eliminate wasted time by making each tweak to the product be made by the research rather than by a whim. Getting as much data together as possible is absolutely necessary when pitching a VC firm or independent venture capitalist.

Knowing Your Audience You Are Pitching To

Knowing the audience that you are pitching to is extremely important. Doing appropriate stalking via LinkedIn and through other social media platforms can help build a personal relationship and help see what the people in the room value. There are some venture capitalists that are more serious than others so reach out to founders of other startups for tips. This might seem like a strange tactic but knowing what the people in the room are going to ask can give you a leg up. Knowing what the investors value is important as well when answering questions. Most great startup ideas solve an everyday problem or issue, stress this as it can allow the investors to identify with this problem. There should be no shortcuts when preparing for this meeting as it could be the meeting that changes your life.

Knowing your audience is important in nearly every business situation whether it is pitching to investors or modifying a product. Data driven decisions are the most appealing to investors so make sure to stress this rather than a vision based on feeling. The hard part is getting investors to agree to a meeting so make sure that you don’t waste this opportunity!