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All right, so I'm here to talk to you about something boring and horrible that every single founder hates: how to pitch your company.
Learn how to pitch your seed stage startup effectively with Y Combinator's Michael Seibel, focusing on clarity, conciseness, and pre-product market fit fundraising.
Ask about this video. Answers come from its transcript only — with the timestamp, so you can check them.
Generated from the transcript and can be wrong — check the timestamp.
Key Takeaways
- Clarity and conciseness are more important than energy or flashy presentations.
- Investors need to understand your company immediately; if they don't, you won't get funded.
- Tailor your pitch differently for investors and customers.
- Show traction by demonstrating progress and execution, not just metrics.
- Highlight unique insights and relevant team accomplishments to build credibility.
What the video covers
- Pitching investors is often the most painful task for founders, especially pre-product market fit.
- Founders must clearly and concisely explain what their company does to secure funding.
- Investors are not the users, so founders need two different explanations: one for investors and one for customers.
- The pitch should cover what the company does, the team, traction, unique insights, market size, and the ask.
- Avoid jargon and overly fancy presentations; simplicity and clarity stand out.
- Traction does not require perfect metrics but should show progress and execution speed.
- The team slide should highlight relevant accomplishments without long personal stories.
- Unique insights about the problem and solution are critical and intellectually interesting.
- Founders should unlearn common fundraising myths and focus on what actually works.
- Examples like Airbnb illustrate how to pitch clearly and effectively.
Chapters
- 00:00Introduction: The Pain of Pitching
- 01:37Why Founders Fail to Explain Their Company
- 03:06Focus on Pre-Product Market Fit Startups
- 04:41Using Airbnb as a Pitch Example
- 05:54Pitching Without Energy or Flashiness
- 07:11Common Founder Mistakes on First Slide
- 08:32Key Elements of a Pitch
- 09:50Team Slide and Highlighting Accomplishments
- 11:11Traction: Showing Progress Over Perfect Metrics
- 12:27Unique Insights and Market Understanding
Full Transcript — Download SRT & Markdown
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investors and pitching investors is basically the most painful thing that companies do what I find fun is that any founder you talk to can remember every single investor who said no to them and they hold a special kind of I
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We just got through demo day and helped over 200 companies pitch investors, and pitching investors is basically the most painful thing that companies do.
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companies to be much more successful at fundraising when you are pre-product Market fit and that's really important this is not for raising series A's I assume most of you here pre-product Market fit and so what I hope to do is
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What I find fun is that any founder you talk to can remember every single investor who said no to them, and they hold a special kind of—I don't want to use the word hatred—but they hold a special something for those people.
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interviews and one of the things that Founders don't understand is that if I don't know what your company does I can't fund you the number one barrier to not knowing what your company does is you not me not the world that's
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They desire to prove them wrong.
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concise and easy to understand and so a lot of what I'm going to do today is going to not sound fancy because it isn't it just works there's a talk over there that tells you about all the fancy things
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So what I wanted to do today is give you all the tips that we give YC companies to be much more successful at fundraising when you are pre-product market fit.
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company do who's on your team what's your traction what do you know that everyone else doesn't or would disagree with you about your unique insights what's your Market size and what are you asking for this is a pitch that's
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And that's really important. This is not for raising Series A's. I assume most of you here are pre-product market fit.
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example right so Airbnb lets any home or apartment owner rent out their apartment online sentence one they collect the payment online and take a let's call it 15% fee for every booking that's sentence two that's it a lot of the magic comes in the
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So what I hope to do is get you to unlearn some of the fundraising advice that you've learned so far, which is probably wrong. That's my goal.
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$4,000 by renting your apartment out and that's the amount of money you need to pay your rent for the next two or three months all you have to do is take some photos of your place and put a
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So number one: you stand out by being concise and easy to understand.
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can imagine them being in DC I don't know how old you all are but you probably remember the Obama inauguration or the fact that Obama was President you can imagine the hotel rooms being sold out and you can imagine somebody being
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I've done, I think, over 2,000 YC interviews, and one of the things that founders don't understand is that if I don't know what your company does, I can't fund you.
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where people go wrong one they pitch something or they explain what they do in a way a customer would understand but an investor would not for most of you investors are not your users you use jargon with your users you
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The number one barrier to not knowing what your company does is you, not me, not the world that's oppressing you, not your users, not your advisors. It's literally you.
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we tell YC companies is you need two different answers to what do you do one that you give investors and another one you give customers and they're different the words on the front page of your website are for customers if you're
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A lot of people think that they need to bring a bunch of energy and pizzazz and sizzle and shark tankiness to a pitch. You don't.
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clear and easy to understand your goals should be 80% accurate 100% clear not 100% accurate 50% clear I talked about an example that's too general what I could have said about Airbnb is for example if you are in a
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You actually stand out by being concise and easy to understand.
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understand next up in their example they don't illustrate the problem and solution right I talked about that waiter inherent in that is that waiter doesn't make very much money and they need to pay their rent and Herb helps
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And so a lot of what I'm going to do today is going to not sound fancy because it isn't. It just works.
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Founders screw up you do not want to leave the first slide of your presentation without investors knowing what you do so many Founders have the first SL of the presentation with a nice logo on it and they say like and then they move on
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There's a talk over there that tells you about all the fancy things that don't work, so if you want that talk, you can—I’m just joking.
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just ask hey so now that I've explained what we do do you understand or would another example be helpful you can do that it's really simple next your team um people screw up the team slide all the time the purpose of team is
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All right, so these are the common elements of a pitch. These are the things that you need to be able to talk about: what do you do, what does your company do, who's on your team, what's your traction, what do you know that everyone else doesn't or would disagree with you about—your unique insights—what's your market size, and what are you asking for.
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how they were starving startup Founders who couldn't pay their rent and the first time they did this they set up a website for design conference hosted three guests so they could pay their rent if you can weave how you've experienced
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This is a pitch. That's it.
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stage investor I'm trusting the CEO with money if I don't know who they are who am I trusting number two who writes code number three telling telling long Stories the team side is not the opportunity to tell your life story
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So let's start with what do you do. You need to be able to say what your company does in two sentences, and you need to be able to give a specific example.
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missing specific accomplishments there's one company in this badge that literally worked on the Mars rover um the founder was like worked at JPL and like build software to make the Mars rover project actually happen didn't talk about it I didn't even know when we accepted
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So let's use Airbnb as an example, right?
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and he's like yeah I I did did and I'm like can we talk about that please if you've done something cool say it without the Li story just say that you did the software for the Mars rover it'll be
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Airbnb lets any home or apartment owner rent out their apartment online. Sentence one.
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right what people screw up with traction all the time is that you can have traction if you're pre-launch you can have traction if you don't have a great graph all traction is communicating is what you've done since you've started
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They collect the payment online and take a—let's call it 15% fee for every booking. That's sentence two.
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publicly on the flip side if you're building an IOS app and it's been 2 years and it's in test flight with 100 users that's not impressive so taking too much time and not getting anything done is the opposite here what investors are looking
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That's it.
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might not have those things and they'll still invest if you communicate you get things done quickly and the only way you communicate you get things done quickly is if your traction slide includes how much time you've been spending right the biggest mistake YC
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A lot of the magic comes in the example, and I'll give you a real-world example.
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work advisor surveys like fake work work that's not really furthering their company and then last and here's a tricky one you don't need a traction slide if you don't have any traction putting a bad traction slide is worse than having no traction slide at
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Imagine that you're a waiter who lives in Washington, DC, and it's 2009, and the Obama inauguration is happening in town, and every hotel room is booked.
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team so fake is worthless next unique insights what are the non-obvious things you've learned about the problem the customer or the potential solution this I think is the most intellectually interesting part of a pitch but you only get the
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You can make two, three, four thousand dollars by renting your apartment out, and that's the amount of money you need to pay your rent for the next two or three months.
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your insight's good or not so when you think about unique insights I love using Airbnb as an example Airbnb had one that was very unique all of the other products that came before it that let people do time
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All you have to do is take some photos of your place and put a listing on Airbnb, and Airbnb will handle the payments.
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and it prevents guests from booking whereas if a third party stands in the middle and processes payments both parties can trust that third party more than they trust each other and it facilitates the marketplace working that's an important unique
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We get you a great guest, you give them a great experience, and you got your rent paid.
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agree with the thing that you're saying when you say it it's not unique number two not being specific with your examples this is another place where vager comes in like you can tell a story here about your unique Insight you
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What's interesting about that example is it's specific. You can imagine a waiter. You can imagine them being in DC.
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and had a super awkward experience with his host who thought he was trying to rip them off right bam that's a real good learning and then last but not least not using numbers and facts especially if you're talking about unique insights
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I don't know how old you all are, but you probably remember the Obama inauguration or the fact that Obama was president.
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is how you calculate the number is what's important as an investor I don't know how many potential users you might be able to get you have to educate me about that you should do that research I don't know how much you're going to charge the
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You can imagine the hotel rooms being sold out, and you can imagine somebody being able to rent their place out for a lot of money and pay their rent for a lot of months.
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Bottoms Up calculation of how many users and how much you can charge them and why teaches me a lot if you teach me in a pitch I think of you as an expert and I want to fund experts so how do people screw up they
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That is a great example.
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of users we charge them this much show me the math and then three not talking about comparable products so if we're going to replace figma and your pricing competitive with figma tell me that tell me figma charges this much and we're going to charge this
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What I didn't do was I didn't give a vague example.
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interesting one um and I can kind of share some personal stories about this in your pitch you actually have to ask for money you would be be shocked at how many pitches people do and they don't ask for
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So let's talk about where people go wrong.
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mindset of an investor for a second I've been an angel investor for I don't know seven years um there are three mindsets I have when I'm listening to a pitch mindset one is I will never fund this company most common will never fund this
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One, they pitch something or they explain what they do in a way a customer would understand but an investor would not.
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company category three that people don't talk about if they ask me it will be uncomfortable for me to say no so I will write them a check I'll tell you that in my experience this is up to 10% of the
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For most of you, investors are not your users.
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is you ask you got to ask put them on the fire and this is especially true for Angels this is especially true for Angels got to ask so what are the common errors this is pretty simple not asking right not
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You use jargon with your users. You assume a lot of common experience with your users.
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what Revenue Milestones you're going to hit or what usage Milestones you're going to hit with the money hiring is a means to an end the end is revenue and usage of your product so your ass slide needs to be we're
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If your investor is not your user, they don't have that experience.
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months from now you're not going to be good at this ask slide so make the goal and make it something that people would be excited by and then ask for money all right so we've gone through the individual
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You have to use simple language that they will understand, not complicated language that makes you sound smart.
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that's pretty clear and the ask which should be at the end that's pretty clear the elements in the middle need to be ordered by which is most impressive if you've got a ton of traction great traction should come
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So one thing we tell YC companies is you need two different answers to what do you do: one that you give investors and another one you give customers, and they're different.
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standard format they can't leave and they don't realize that like there is flexibility to make your most important points early a lot of people think that an investor is going to sit down for a 30-minute meeting and give them 30
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The words on the front page of your website are for customers.
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late that's dumb after I know what you do put the best stuff you have right afterwards earn that next two minutes earn that next two minutes earn that next two minutes um next is treating your pitch like you're delivering a book report in
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If you're using that for investors, more often than not, you're doing it wrong.
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conversation now doing this is hard like this is actually a very hard skill it's a lot easier just to deliver the pitch and then ask for the grade but what most people don't realize about Investors is that you're not really convincing an
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Number two, they try to be 100% accurate.
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look at a call recording and figure out how much time was the customer talking versus salesperson talking if the customer is talking 50% or more of the time it's much more likely that they're going to buy if the investor is talking 50% more
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There were a lot of details I left out of Airbnb in that two-sentence description with the example, but it was clear and easy to understand.
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that did you have a common experience oh I see you fund that X Y and Z I think they had to deal with something similar like get them talking if the investors is like oh you know I'm really interested in this D
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Your goals should be 80% accurate, 100% clear, not 100% accurate, 50% clear.
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get them talking because the more that they're contributing ideas the more that they're making their own Connections in their head about why this thing's going to work the more they're going to convince themselves to give you money so I can't tell you enough this
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I talked about an example that's too general. What I could have said about Airbnb is, for example, if you are in a place that has a big event and you need to pay your rent, you can rent your place out and then you can pay your rent.
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um a lot of pitches nowadays are on Zoom you got a closeup of that person's face and if you actually look at it you can tell whether they are interested in what you're saying or not if you look I'm a really crappy
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Same basic story, none of the little facts that make it stick in your memory and make you understand.
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investors have a ton of tells they're not trained they're not trained poker players who like hide their TOS put sunglasses on and like headphones and right their face is an open book you can tell whether they're interested or not if you're
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Next up, in their example, they don't illustrate the problem and solution right.
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background image on the slide if your slides are visually interesting that means I'm not focused on you the person I want to give money to or not I'm focused on some designer's work if you need a designer to build a
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I talked about that waiter. Inherent in that is that waiter doesn't make very much money, and they need to pay their rent, and Airbnb helps them pay their rent.
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will emphasize the wrong things and it's not their fault it's your business you understand the most important things not someone else so a designer is going to try to create something visually interesting counterintuitively you want something visually boring visually boring remember clear
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So instead of having a complicated problem-solution slide, I just told you what the problem and the solution was right up front.
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accelerator we fund early stage startups with $500,000 standard deal and we've invested in some of the best technology startups in the last 18 years including stripe Airbnb Dropbox coinbase instacart door Dash Etc that's two sentences example um when I did
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And then last but not least, and this is one that I think a lot of founders screw up: you do not want to leave the first slide of your presentation without investors knowing what you do.
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participated in a 3-month program with other Founders where we we encouraged to build and launch our product quickly at the end of that process we raised money at demo day and within 3 months we had money we had a new friend group that encouraged
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So many founders have the first slide of the presentation with a nice logo on it, and they say, like, and then they move on, and investors are sitting there saying, I have no idea what this company does.
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companies that generate over $100 million in Revenue um that's pretty good TR slide uh team right now as group partners of YC are people who have started funded hired fired and done everything that you are going to do as a startup founder and
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And now I'm looking at graphs and charts, and I don't have any idea what's going on.
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been unique insights there are three unique insights for YC they're really basic one filling that application and not needing warm introduction gives us access to better deal flow than any other investor in the world two funding people in a batch
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Don't do that.
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for any product good or service you want to run an auction so YC companies tend to raise at a higher valuation and dilute less than people don't do YC those are three unique insights Market size since YC started they're about 40
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One thing you can actually do is just ask, "Hey, so now that I've explained what we do, do you understand, or would another example be helpful?"
Topics:startup pitchseed stage fundraisingY CombinatorMichael Seibelpre-product market fitinvestor pitch tipsstartup tractionunique insightsfundraising advicepitch deck
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