176. Simplicity is Genius

VC Minute
Clear communication is crucial for startup CEOs to sell their vision effectively to investors, customers, and employees. SpringTime partner, Allyson Plosko, shares why Simplicity is Genius.

VC Minute – quick advice to help startup founders fundraise better

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Rich Maloy:
If you’re not already subscribed to the VC Minute Substack, you should be. SpringTime partner Allyson Plosko pens a great biweekly piece. It includes her own quick advice as well as some recent relevant articles. With those links, she goes a step further and adds her own take, providing her specific VC insight into all of the posts. Go to VC Minute dot sub-stack.com. And today, I’ve managed to convince her to read her piece from two weeks ago, which was phenomenal. Take it away, Allyson.

Allyson Plosko:
From investors to customers to early employees, a startup CEO is responsible for selling the vision of the company to a variety of stakeholders. In the early days, the CEO is the company spokesperson and is responsible for telling the story of the business. This is why investors view communication as such a highly valued trade, as do startup CEOs.

Episode 27 of the VC Minute discusses the need for pitch decks to be straightforward and easy to understand. The title of the episode, Don’t Make Me Think,” is exactly what you should be aiming for when you create a pitch. An investor will likely lose interest if the pitch is hard to follow or unnecessarily complex. While it’s easy to assume this is a selfish move by investors who don’t want to spend the time to understand the business, that’s missing the point.

Investors use the pitch as a litmus test for how a founder communicates. Out of all the stakeholders, a founder who interacts with an early-stage investor typically has the most experience listening to vastly different pitches and handling and picking up on the nuances within each. Plus, they love founder enthusiasm and are more optimistic than most about new technology. When an investor can’t grasp the concept or get excited about it, it raises a red flag. The immediate thought running through the investor’s head is the following: if I’m having a hard time understanding this, how effective will the founder be at convincing early employees to join or getting customers to buy the product?

Startup founders are experts in the areas where they’re building. They have to be. Most people they interact with, though, aren’t. Founders have to be able to explain the problem they’re solving and the solution in a way that non-experts can grasp. All people, not just investors, are generally lazy and protective of their time. This means they aren’t going to sit through a 45-minute presentation that sort of explains the concept. A founder has to be able to hit the high points in just a few minutes.

When you’re deep into building a business, it can be hard to pull up and see things as an outsider. Everything feels consequential, but to someone not in the day-to-day, most things aren’t. The best way to ensure you’re communicating the most important details is to practice. Get outside of your echo chamber and practice with friends and family who have various levels of understanding of tech in your target industry. Identifying which parts they get stuck on can help you discover opportunities to be clear and more concise in your storytelling, allowing you to have more productive conversations and convert earlier champions quickly.

About AVL Growth Partners
AVL Growth Partners, founded in 2009, is the leading fractional Finance and Accounting firm supporting organizations in pivoting from growth to scale. AVL brings an experienced team of CFOs, Controllers, and Accountants to your organization, delivering transparent, strategic actions for short and long-term success. Transform your financial approach affordably with AVL, supporting companies coast to coast – get to know AVL Growth Partners at avlgrowth.com. (Sponsored)

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