How do you pitch your investment thesis?

As a venture capitalist, you need to have a clear and compelling investment thesis that guides your decisions and communicates your value proposition to entrepreneurs, LPs, and peers. An investment thesis is a statement of what you believe, why you believe it, and how you plan to act on it. It helps you focus on the opportunities that match your vision, criteria, and capabilities, and avoid the ones that don't. In this article, we will cover how to pitch your investment thesis effectively in different scenarios and contexts.

1 Know your audience

The first step to pitch your investment thesis is to know your audience and tailor your message accordingly. Different stakeholders will have different expectations, interests, and questions about your thesis. For example, entrepreneurs will want to know how you can add value to their business, LPs will want to know how you can generate returns and mitigate risks, and peers will want to know how you can collaborate and differentiate yourself. You should research your audience's background, goals, and pain points, and craft your pitch to address them.

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David Cruz e Silva 🎙

Operator turned angel LP @ eu.vc 👼 Backing top tier VCs & doubling down on their breakout companies | WEF Global Shaper & Member of Expert Network 🌍
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VCs must grasp LP profiles when fundraising as it aligns interests, diversifies portfolios, and mitigates risks. Tailored pitches resonate with each LP's strategy and risk tolerance. Fund size and commitment flexibility are key. Building long-term relationships is vital, considering communication preferences and reporting needs. Addressing due diligence concerns shows professionalism. Highlight networks and connections to add value. Understanding LPs enhances pitch effectiveness and fosters successful partnerships.

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2 Highlight your edge

The second step to pitch your investment thesis is to highlight your edge, or what makes you unique and credible in your domain. Your edge could be based on your expertise, experience, network, access, or insights. You should demonstrate how your edge gives you an advantage in sourcing, evaluating, supporting, and exiting deals. You should also provide evidence and examples of how your edge has helped you achieve success or avoid failure in the past, and how it will help you in the future.

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David Cruz e Silva 🎙

Operator turned angel LP @ eu.vc 👼 Backing top tier VCs & doubling down on their breakout companies | WEF Global Shaper & Member of Expert Network 🌍
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VCs gain competitive advantages in different ways: through extensive networks for deal flow and support, deep sector expertise for insightful investments, operational experience to guide startups effectively, geographic focus for local insights, co-investment relationships for syndicating deals, strong brand reputation to attract high-quality founders, value-add services like marketing and recruitment support, proprietary deal flow sources, data-driven decision-making, influential LP relationships, adaptive strategies, and a long-term commitment to portfolio companies. These advantages, tailored to their strategy and focus, enable VCs to stand out.

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3 Explain your logic

The third step to pitch your investment thesis is to explain your logic, or how you arrived at your thesis and how you test and refine it. Your logic should be based on data, trends, patterns, and hypotheses that support your thesis. You should show how you use frameworks, models, tools, and metrics to analyze the market, the industry, the competition, and the opportunity. You should also show how you validate your assumptions, challenge your biases, and update your thesis as you learn.

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4 Share your vision

The fourth step to pitch your investment thesis is to share your vision, or what you expect to happen and why it matters. Your vision should be based on your goals, values, and beliefs. You should articulate how your thesis aligns with your vision and how it creates value for yourself and others. You should also paint a picture of the future that inspires and excites your audience, and show how you can help them achieve it.

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Anna Gunn (she/her)

Connecting Dots Globally | Strategist | ✨Inspiring Success with Storytelling in Content, Video, and Visuals
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If you can paint a picture, tell a story, and bring the audience along, it will engage them further. Dry facts and figures have their place, you ultimately want your audience to journey with you and be inspired.

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5 Anticipate objections

The fifth step to pitch your investment thesis is to anticipate objections, or what could go wrong and how you would handle it. Objections could come from external factors, such as market changes, regulatory issues, competitive threats, or operational challenges, or from internal factors, such as gaps in your team, strategy, or execution. You should acknowledge the potential risks and pitfalls of your thesis, and show how you can mitigate or overcome them. You should also prepare answers to common or likely questions that your audience might have.

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6 Call to action

The sixth and final step to pitch your investment thesis is to call to action, or what you want your audience to do next. Depending on the context and the purpose of your pitch, your call to action could be to request a meeting, a feedback, a referral, a commitment, or a partnership. You should make your ask clear, specific, and reasonable, and explain the benefits and the urgency of it. You should also follow up with your audience and track the progress of your pitch.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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David Cruz e Silva 🎙

Operator turned angel LP @ eu.vc 👼 Backing top tier VCs & doubling down on their breakout companies | WEF Global Shaper & Member of Expert Network 🌍
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VCs should consider the macroeconomic climate when fundraising and planning future rounds. Economic conditions can impact investor sentiment and appetite for risk. In bullish economies, LPs may be more willing to allocate capital to VC, while in downturns, they may become more cautious. VCs should assess how economic trends might affect their ability to secure commitments, timing of fundraising efforts, and the size of the fund. They should also consider how portfolio companies might be impacted by economic fluctuations and develop strategies to support them through challenging periods. Overall, being attuned to the broader economic context is crucial for successful fundraising and fund management in the dynamic world of venture capital.

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How do you pitch your investment thesis?

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2

3

4

5

6

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1 Know your audience

2 Highlight your edge

3 Explain your logic

4 Share your vision

5 Anticipate objections

6 Call to action

7 Here’s what else to consider

Venture Capital

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How do you pitch your investment thesis?

1

2

3

4

5

6

7

1 Know your audience

2 Highlight your edge

3 Explain your logic

4 Share your vision

5 Anticipate objections

6 Call to action

7 Here’s what else to consider

Venture Capital

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