Why pitching to VCs is the numbers game

John Hall
5 min readJan 26, 2022

A founder’s ‘insight’ is the core ingredient for startup creation. It’s the thing that they know but others don’t yet know. The insight reveals a unique market opportunity that the founder believes they can exploit before others jump in.

The startup’s first product embodies this insight.

To fund the startup, founders must find investors that will embrace the insight and buy into the vision. This can take a lot of approaches. What experienced founders know but can seem counterintuitive to first-time founders is that many of these pitches will go absolutely nowhere — but this is not necessarily a bad sign. If investors think the idea is too offbeat or they just don’t get it and pass, this can actually be a good sign.

But surely, if investors don’t immediately fall over themselves to invest, the idea must be a flop?

A great parallel throws light on this. We know from lean startup theory that the first market to attack is the ‘early adopter’ market. The early adopters eagerly grab the initial product ‘as is’ and use it to solve an immediate problem. The first job is to conquer this initial, if small, market. This validates the fundamental business hypothesis and provides credibility to expand.

Importantly, in seeking the early adopters, a founder does not iterate on the product. They iterate on the customers. They search for the customers that immediately resonate with the insight and the product that embodies it. These customers will jump on board with enthusiasm and the sales cycle will be minimal. Price will hardly matter.

In the case of early investors, a pattern-matching mindset can often filter out the unconventional. An offbeat proposition can easily get passed over. This is only human nature at work — safety lies in consensus. But somewhere in the crowd a contrarian is waiting. So don’t iterate on the story, iterate on the investors.

The world’s most successful VC’s say that the biggest returns are often associated with insights or ideas that seem to defy conventional wisdom — what PayPal founder turned investor Peter Thiel calls a “secret” in his book, Zero to One. These are the breakthrough ideas that have the potential to create a “category winner”. For a VC, these are the ideas that will…

John Hall

Founder & CEO of UK startup to scaleup advisory firm Duet Partners