What’s your secret sauce? VC’s on what makes a compelling pitch

While the funding landscape remains difficult for some, venture capitalists (VC’s) at LSX World Congress USA in Boston, Massachusetts told attendees what they think makes a company’s pitch compelling and garner investment.

Dirk Landgraf, partner at SV Health Investors, said a clearly “defined investment thesis” is the most important thing for a company to have when seeking VC funding. He explained to the audience what he meant by investment thesis and cited “the positioning of the company, how it is conditioned in the space, what their secret sauce is, what makes them unique?”

Landgraf said he often feels that companies struggle with this aspect and instead “they come to us, and they pitch, but it is left for me to figure out what the investment thesis is. Ideally it should be so simple that I can explain the investment thesis and why that investment is exciting in 30 seconds or less.”

Though an investment thesis is critical, he placed emphasis on the importance of the team and their technology. Evan Caplan, principle at OrbiMed, echoed Landgraf’s point about the need for a clear investment thesis and said, “sometimes it is surprising when it takes quite a bit of time to get to the technology.”

He suggested that companies start with their technology and then go into depth about what the application is, what its indication is and why it is needed. By doing so, the individuals pitching can show VC’s how their companies are different and what use the technology will have. Additionally, he said firms should make sure “the right teams are around the table.”

The theme of presenting a clear, concise, and to –the-point pitch remained a prominent talking point throughout the panel. Ralf Saykiewcz, managing partner at Raudi Capital, shared with the audience how you can have “the best developed business plan and the best developed pitch” but if it “does not allow the investor to understand it in the first two or three slides, what you are doing is a lost cause.”

To provide an example of this, he told the audience about a “very well-funded company with a brilliant product,” who is a client of his. He explained how the client had a 62-slide pitch, and he did not find out what they were doing until the 18^th slide.

“I was looked upon very, very poorly by their CEO,” said Saykiewcz. “I said, well, this is bullshit. This is not going to work. It is fantastic […] we have all this information, yes, but I do not understand it, and if I do not understand it, neither will the investor.”

He ended his point by placing emphasis on the clarity of messaging, the plan explaining how you can make the money, the understanding of the market you are in, the team you have in place, and showcasing your science. However, he said all this needs to be “shown to us in a way that we can actually understand, because if I cannot understand it and I am pretty good at reading, then neither can most people.”

Quotes have been lightly edited for clarity.