You are one of thousands of startups pitching to convince an investor to back you. Insights from the Luxembourg Venture Days provide some keys to success.
Lena Mårtensson
Your window of opportunity might last a minute, or even less. VCs review thousands of pitches each year and need to take quick decisions. “Our business model is such that not every startup fits our return on investment pattern,” said Quentin Dupraz, Principal at Ilavska Vuillermoz Capital, during his masterclass “The Perfect Pitch” at the 2024 Luxembourg Venture Days.
To deliver the return expected from our investors, we can’t invest in good companies – we need to find fantastic ones.
Quentin Dupraz, Ilavska Vuillermoz Capital
“70% of startups don’t even return the money given to them. To deliver the return expected from our investors, we can’t invest in good companies – we need to find fantastic ones,” he explained. “If a pitch deck does not include the information we expect, we will reject it. We might not be right in doing this, but it is what we do.”
We extracted the following 10 top tips from the advice he shared with the masterclass participants.
“The average relationship between a company and an investor lasts around 10 years – actually longer than a marriage, for which the average is 7 years. The pitch deck is thus the starting point for a long-term relationship,” Mr Dupraz said, advising startups not to expect VCs to open their wallet based on the pitch deck only. “Think of it as dating and see the pitch as a first drink together.”
“I don’t really look into each pitch deck, I usually take about 30 seconds to browse through it and look at the headlines,” Mr Dupraz explained. “You need to make sure that you capture our attention and interest directly.”
The pitch deck should immediately provide a clear, simple explanation of what the company does and why it exists. “Define your problem clearly to make it as relatable as possible and use simple terms that your grandma could understand. Use pictures to present your product visually.”
Including market size calculations in the pitch deck is of little interest. “We want to see that early-stage founders have the ability to differentiate themselves in a niche market where they can serve a vertical so well that they understand exactly what is needed and can build a product that customers can’t do without. This is the only edge you can have on larger players,” Mr Dupraz pointed out. “You can then expand into adjacent markets.”
While new tech products might attract the interest of a limited number of tech enthusiasts, a company’s long-term success is dependent on its ability to generate lasting revenue. “Even if you are an early-stage venture, we are looking for something in the pitch that reassures us that you can become a mass-market player in the long run.”
The business model the company will use to monetise what it does is of fundamental importance to investors. “Who pays what to whom? Even if your business model is not yet complete, put in the first parts. I want to understand how you envisage to make money,” Mr Dupraz emphasised.
The go-to-market strategy is another critical element. “Outline your vision and explain how you will organise your company to achieve it and become an established player. What are you going to put in place to deliver what you said you will get in terms of number of users, etc.? What will your distribution channels be? What partners will help you sell, and what will you add to your offering to make large companies want to use it? You can also say what geographical market you will focus on first.”
“No matter where you are in the fundraising spectrum, highlight what you have done already to come to where you are today,” Mr Dupraz advised. “Product testing, iteration, interviews with potential clients, acquisition of the first people who pay for your product. Even if you don’t have revenues yet, you can have done the research that makes us think that you are backable.”
“It is very important that you don’t just mention an amount but highlight why you need it. Break down how you intend to use it and what you expect to achieve. Outline your milestones and show that you thought this through. We will judge you on that.”
Luxembourg-based Ilavska Vuillermoz Capital focuses on fintech and climatetech, but not all startups do the research needed before getting in touch. “I’m surprised by how many messages I receive from companies in fields that we don’t invest in,” Mr Dupraz said, advising startups to make sure that they get their targeting right. “When you get a no, make sure that you understand whether it is because your company is not good or because you contacted the wrong funders.”
