Five steps for deeptech founders to follow when pitching to investors & how to avoid the “you’re too early for us.”

By Miles Kirby, CEO at Deeptech LabsLast year set a new benchmark for European deeptech companies, with a record €2.6bn raised in funding, surpassing the €2.1bn raised in 2021. While it’s a positive time if you’re looking to scale your deeptech company, we can’t rest on our collective laurels.

Miles Kirby

Let’s remember that while European companies are breaking new ground on technologies as diverse as artificial intelligence, robotics, and quantum computing and attracting record investment, that share of investment doesn’t match up to the levels of deeptech investment in the US ($33 billion EU v $144 billion US).

To help bridge this gap, I’ve spent much of my career mapping how and why deeptech companies are different from regular tech companies - and crucially, how this changes the dynamic between founder and investor, especially in the post-seed, pre-Series A phase of a company’s journey.

Deeptech companies are by their nature solving the hard things. Their founders are more likely to have academic backgrounds and less commercial experience, and their product development roadmap can be many times longer and more winding than other tech companies. That’s why early-stage deeptech founders are more at risk of hearing those dreaded five worlds at the end of an investor pitch:

“You’re too early for us.”

There’s actually a lot that deeptech founders can do to avoid this meeting outcome through understanding the expectations of investors better, framing their narrative, and owning the process. I’ve boiled it down into five main tips.

1. Get smart with strategy and perfect the process

Securing investment is no different from a successful sales process. Well-oiled, well-executed, and strategic.

So, set yourself milestones, learn and improve the process and the pitch as you go.

Be smart with who you approach for investment, and when, too. Aim for investors that know the space (look at what they post about online) and are well connected, who can make intros to your target customers and the talent you need to grow your team.

If you’re building something genuinely new, it’s possible few investors will have direct experience in your ’zone of genius’. Taking ‘dumb money’ or worse still, an investor with a seat on the board who doesn’t understand the space can be catastrophic. So look for similar deeptech plays in investors’ portfolios, similar business models, and above all, a curiosity about your business that’s infectious.

Never pitch to your ideal investor first. Working your way up gives you a chance to hone your pitch and learn from the feedback, so you ace the most important opportunities in your calendar.

2. Turn up the temperature

Find a CEO or other investor you have both worked with in the past, and make that intermediary your connector and recommender so you come into the first meeting as a company that the potential VC should pay attention to.

A major sticking point for deeptech founders with a long development roadmap ahead is how to add suitable references to revenue and customer traction in the pitch—a tough task if you’re yet to generate any as a business. A way around this is to generate a proxy. For example, proof of concept projects and joint development agreements. Letters of intent from credible customers can be useful too.

3. Build buzz around your ideas

Go into every investor meeting with a clear plan and outcome in mind. No two meetings are the same, even with the same VC, and so preparation ahead of meetings is mission critical. As I like to say, “no surprises.”

The job of the first meeting is to generate enough excitement to get a second meeting. That’s literally it. So don’t make the common mistake of going too deep into details early on.

Investment is fundamentally about trust and that takes time to build. My approach is, with every meeting along the way, to peel back another layer and reveal a bit more about the business. This is an especially helpful strategy for companies with highly complex tech propositions. Let your contacts pore over each new detail; a drip-feed approach to information at the start will only increase the perception of value.

4. Make sure you’re pitch perfect

I’ve seen many otherwise capable deeptech founders lose the room with a pitch that’s flat, boring, or too detailed. Make sure that pitch is crisp, succinct, and easy to remember. To help shape your presentation, make sure it answers the following questions in the right order:

What is the customer problem you're trying to solve? Don't dive deep into your technology until you’ve convinced your audience you’re solving an important problem for real customers

Who are your customers? Back this up with proof points to show there is a willingness to pay and engage - even if that point for your company is some time away

How big is the market and how competitive is it? Showing that there is a wave to ride and how you’ve already thought about beating your rivals is a big tick

What happens with the investors’ money and when? Map out milestones and show you have the potential to build a really big business and why now is the right time

Product demos can be useful, they show you have something real that works—provided it’ll work smoothly and won’t take the investor down a technology warren hole.

Whatever you show, try to answer the question every investor looking at a deeptech opportunity has on their mind - how real is this and how far away from revenue are they?

5. Open your ears

Every pitch should be a conversation, not a broadcast. Creating discussion and gaining feedback speeds the process up for everyone involved. If things go well, you can implement suggestions and answer questions from investors in the next version of your presentation, which gives them the feeling of progression every time you meet.

A quick no from an investor, with detailed critical feedback, is 10 times more useful than a polite conversation and a "looks good, but it's too soon, come back later". Before the end of the conversation, always ask if there are other VCs they recommend you talk to, and if they can introduce you—the worst they can say is no, and frequently the answer is yes.

Pitching for investment can be a daunting process, even for founders who’ve successfully raised multiple rounds. As a deeptech founder looking for investment in the European investment community, you’ll likely benefit from additional support, access to established funding networks, and insight from successful deeptech entrepreneurs. That’s why we launched our accelerator VC model Deeptech Labs, to catalyse early-stage deeptech success. Whatever route you choose, preparation and partnership are the keys to turning investor feedback from “you’re too early” into “when do we start?”

This is an extended version of an article that first appeared in Business Weekly.