Early-stage investors criticize unprepared founders and offer advice for the “perfect pitch”

The road to raising capital for a startup is tough. Research shows that more than half of tech companies fail to reach two rounds of investment. The problem in many cases is that entrepreneurs are talking to institutional investors for the first time.

For Francisco Jardim, founder of SP Ventures, an executive who invests in early-stage startups and has already contributed to companies such as Agrolend, Jetbov and Magnamed, entrepreneurs need to improve their pitches to attract investor interest.

“An investor’s attention span lasts 15 minutes,” Jardim said during a panel held Tuesday, April 16, during the Web Summit. “Entrepreneurs need to get attention to get another 10-20 minutes to pitch their business.”

Jardim explains that his manager evaluates almost 80 startups before making a single contribution. In addition to getting the investor’s attention at the beginning of the conversation, it’s also worth exploring what each manager is focused on. “You need to study the background, that transactions and create hooks that can bring value to the proposition,” he said.

SP Ventures, for example, works with two funds, with the second investment mechanism raising R$ 300 million to dedicate to start-ups working in the agri-sector.

Inconsistency of interests of investors and the founders also mentioned on the same panel Orlando Sintra, founder and CEO of BR Angels, an early-stage manager that evaluates more than 200 startups a month and that recently created a R$15 million fund to invest in 10 businesses.

“We’ve already received many proposals that have nothing to do with the fund in terms of the size of the check or the thesis,” Cintra said during the discussion. “The advice I give the founders in that today they have artificial intelligence tools that can help with that process.”

Investors’ advice for entrepreneurs is to make a list of executives they want to talk to, and start with the ones they’re least eager to talk to. “Change the order. It is better to burn the bullet with lower priority investors and listen to the criticism before going after the tops,” he said.

While it’s important to “practice” your pitch with different investors until the pitch is perfect, Cintra advises entrepreneurs not to shoot all over the place. “Evaluate yourself and understand each fund’s process and priorities,” he stated.

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