“Not too early for us”: Three tips for DeepTech founders when pitching to investors
Last year set a new benchmark for European DeepTech companies with a record €2.6 billion raised in funding. While it’s a positive time if you’re looking to scale your DeepTech company we can’t rest on our collective laurels, writes Miles Kirby, CEO at Deeptech Labs in Cambridge.
Let’s remember that while European companies are breaking new ground and attracting record investment on technologies as diverse as artificial intelligence, robotics, and quantum computing that share of investment doesn’t match up to the levels of DeepTech investment in the US ($33 billion EU v $144 billion US).
To help bridge this gap, I’ve spent much of my career mapping how and why DeepTech companies are different from regular tech companies and, crucially, how this changes the dynamic between founder and investor – especially in the post-seed, pre-Series A phase of a company’s journey.
One thing I’ve become aware of is that because DeepTech companies are by their nature solving ‘the hard things’, their founders are more likely to have more research and less commercial experience and their product development roadmap can be longer and more winding than other tech companies.
That’s why early-stage DeepTech founders fear hearing those dreaded five words at the end of an investor pitch: “You’re too early for us.”
Thankfully, there’s a lot founders can do to avoid this outcome through better understanding the expectations of investors, framing their narrative, and owning the process. I’ve boiled it down into three main tips.
1. Perfect the process
Securing investment is no different from a successful sales process: strategic, well-oiled, well-executed.
Be smart with who you approach for investment, and when. Aim for investors that know the space (look at what they post about online) and are well connected, who can make intros to target customers and talent.
Work your contacts book and find a CEO or other investor you have both worked with in the past and ask that intermediary to connect you and promote you as a company the potential VC should pay attention to. If you’re building something genuinely new, it’s possible few investors will have direct experience in your ’zone of genius’. Taking ‘dumb money’ or worse still, an investor with a seat on the board who doesn’t understand the space can be catastrophic.
So look for similar DeepTech plays in investors’ portfolios, similar business models and above all a curiosity about your business that’s infectious. Never pitch to your ideal investor first. Working your way up gives you a chance to hone your pitch and learn from the feedback so you ace the most important opportunities in your calendar.
2. Make sure you’re pitch perfect
I’ve seen many otherwise capable DeepTech founders lose the room with a pitch that’s flat, boring, or too detailed too soon. Make sure that your pitch is crisp, succinct and easy to remember. To help shape your presentation, make sure it answers the following questions in the right order:-
- What is the customer problem you're trying to solve? Don't dive deep into your technology until you’ve convinced your audience you’re solving an important problem for real customers.
- Who are your customers? Back this up with proof points to show there is a willingness to pay and engage – even if that point for your company is some time away.
- How big is the market and how competitive is it? Showing that there is a wave to ride and how you’ve already thought about beating your rivals is a big tick.
Whatever you do, try to answer the questions every investor looking at a DeepTech opportunity have on their mind: how real is this and how far away from revenue are they?
3. Start a conversation
Every pitch should be a conversation, not a broadcast. Creating discussion speeds up the process for everyone involved. If things go well you can implement suggestions from investors in the next version of your presentation, creating a feeling of progression every time you meet.
If it's the end of the road, a quick no from an investor, with critical feedback, is 10 times more useful than a polite conversation and a "looks good, but it's too soon, come back later".
Always ask if there are other VCs they recommend you talk to – and if they can introduce you; the worst they can say is no, and frequently the answer is yes.
Pitching for investment can be daunting, even for founders who’ve successfully raised multiple rounds. As a DeepTech founder looking for investment in the European investment community, you’ll likely benefit from additional support, access to established funding networks, and insight from successful DeepTech entrepreneurs.
That’s why we launched our accelerator VC model Deeptech Labs, to catalyse early-stage DeepTech success. Whatever route you choose, preparation and partnership are the keys to turning investor feedback from “you’re too early” into “when do we start?”
• Deeptech Labs is a VC fund, accelerator and catalyst for DeepTech success.
About the author
Miles Kirby is leading Deeptech Labs, a DeepTech accelerator founded with the University of Cambridge, Arm, Cambridge Innovation Capital, Martlet and Ewan Kirk. Deeptech Labs helps companies commercialise new technologies and makes seed investments alongside the accelerator.
Miles is an International Venture Capitalist with experience in the US and Europe in Financial and Corporate venture investing. He set up and co-managed the €150m AV8 Ventures fund and ran Qualcomm's Venture Capital group in Europe. He also started and ran an incubator at Qualcomm in California and formed and managed the Machine Learning, Augmented Reality and Wireless Charging programs. He holds an MBA from University of California, Irvine and BEng in Electronics and Communication Engineering from University of Bristol, UK.