Top VCs reveal what they want to hear in a startup pitch — and what you should avoid saying

Successful entrepreneurship often starts with a compelling investor pitch.We compiled insights from venture capitalists on what they're hoping to hear from you.For example: Hold your ground on important issues and demonstrate your path to execution.Visit BusinessInsider.com for more stories.Venture capitalists want to be convinced.Ask David Rose, and he'll tell you VCs wouldn't be hearing your pitch in the first place if they weren't interested in investing. Rose runs Gust, a digital platform for early-stage entrepreneurs and investors, and Rose Tech Ventures, an angel investment fund and incubator.He said investors are just hoping you'll give them a compelling argument for why they should partner with you.We asked Rose, plus a series of other successful investors (listed below), what persuades them to sign on — and what leaves them skeptical. Below, we've compiled their best advice, on everything from building a pitch deck to writing a thank-you note.Patrick McGinnis is the managing director of the investment and advisory firm Dirigo Advisors.David Selverian is an investor at Bessamer Venture Partners.Laura Sachar is a cofounder and managing partner of StarVest Partners.Dan Estes is a partner at Frazier Healthcare Partners.Dave Munichiello is a general partner at GV.Anu Duggal is the founding partner at Female Founders Fund.Ashton Kutcher is cofounder of Sound Ventures.Show how your product will benefit peopleEstes previously told Business Insider's Lydia Ramsey that biotech investors want to know how a new tool will fit into the current standard of care. “The biggest mistake I see is when someone spends more time talking about how a product would affect the market than they do talking about how it would affect the disease it's designed to treat,” Estes said.The same is true for any investor, who wants to know how your business will make people's lives easier.Don't be cockyIn an interview with Business Insider's Becky Peterson, Munichiello pointed to Stewart Butterfield, founder and CEO of Slack, as an example of an entrepreneur who didn't pretend he had all the answers. (GV invested in Slack in 2014 as part of a $120 million round that valued the company at $1.12 billion, Peterson reported.)“Stewart's conversation with me wasn't about all of the reasons why Slack was awesome,” Munichiello said. “It was, 'Here's how I think about the business. And you may think about it in a different way.' And 'Here are the metrics that I use to measure the business. How do you think about the business？'”Hold your ground on the issues that matter most“Entrepreneurs can, and should, articulate deal breakers to their prospective investors,” Selverian wrote on Business Insider. “If there's something that's important to you and your business, don't compromise. As long as the entrepreneur's reasoning is justified, many investors will be impressed by the vision and leadership conveyed through deal breakers.”Read more: A CEO who launched her company 14 years ago says too many founders have it all backwardShow that you can sell your idea“One of the critical tests that I try to run when I'm sitting across from a founder is: Can you sell me your idea？” Kutcher said at TechCrunch Disrupt in 2018. If not, he worries about the company's future.“If you can't sell me, how are you going to sell your first hire, your second hire, your third hire？” Kutcher said.Demonstrate your path to executionAt Business Insider's Startup 2012 conference, Sachar said she needs to believe the entrepreneur can turn their idea into a successful business.“If you can't execute, you don't have a company,” she said. “A lot of people have ideas.”Read more: The glitz of 'entrepreneurship porn' leads startup founders to make fatal business mistakes. Here's how to avoid themTell investors how you plan to expandDuggal previously told Business Insider every pitch deck should include a five-year growth plan.Duggal added that she wants to see the costs of building your product or service, the potential profit “on a unit basis,” and how that changes at scale. In other words, she said, “As your business grows, do the margins get better？”Prepare a detailed appendix in addition to the deckYour deck should be simple and straightforward. During the pitch meeting, Selverian recommends having a detailed appendix that will answer any questions that come up.Address the potential competitionOne common mistake Duggal sees in pitch decks is “not addressing competition or figuring out the market landscape.”She added, “When we think about investing in a company, we want to understand — that's great that you have an interesting idea or you spotted something that has the potential to be an exciting business — but we also want to understand what is already in the market.”Propose an action plan in a thank-you noteIn your follow-up note after the pitch meeting, McGinnis said, “propose concrete next steps for them to react to — amorphous communication conveys amorphous management.” Reiterate specifically what you're asking for, and ask whether there are other people you should meet who the investors can introduce you to.You can also create FOMO by letting them know when another VC has already agreed to invest.Determine whether you need to raise capital in the first placeIf you're bringing in a maximum of $1 million a year in revenue, “it may be a great, wonderful, much-needed business,” Rose said. “You may enjoy it and support your family.” But he emphasized, “the economics are just such that there is no way that you can get an investment from me at any reasonable number for that to make economic sense.”This is because outside investors expect outsize returns on their money, often a large multiple of what they put in. And if there's a low-millions ceiling on the revenue your startup can generate or eventual exit price, there's not much incentive for a venture capitalist to write you a check.In other words, your company may be a “lifestyle startup,” which doesn't require venture capital and probably won't ever be worth $1 billion.Wait to raise capital until you have proof of conceptAn entrepreneur's pitch is a “combination of science and faith,” said McGinnis — but you want to stay more on the side of science than faith.McGinnis often sees founders who don't have any proof their idea is viable. You'd be wise to keep your day job and acquire customers and data before you ask a VC for money.Read more: Keep your day job, move slowly, and don't worry about building a unicorn: A New York 'startup school' eschews everything Silicon Valley ever preachedMeet your 'B list' investors firstAn entrepreneur's pitch is a “combination of science and faith,” said McGinnis — but you want to stay more on the side of science than faith.McGinnis often sees founders who don't have any proof their idea is viable. You'd be wise to keep your day job and acquire customers and data before you ask a VC for money.Show why you — not just your business — are worth investing inRemember that you're pitching yourself, Rose said — not just your business plan. “You bet on the jockey, not the horse.”