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Answer by Patrick Mathieson, venture investor at Toba Capital:
Here's my 2 cents:
Mastery of the major numbers. If you don't know the three or four most important numbers to your business (revenue, number of employees, cash burn, cash in the bank, etc), you come off as completely noncredible. It blows my mind that some CEOs will say, “Not sure—I'll need to ask the CFO” when I ask something as innocuous as, “What was your ending monthly recurring revenue last quarter?” It's hard for me to even give the advice that you should know your numbers really well, because any CEO who doesn't do this instinctively is totally unfit for the job.
The ability to communicate the product's benefits in an extremely clear and concise manner. Ideally when paired elegantly with some insight about the market that seems glaringly obvious after it's explained to you (Mark Castleman has some interesting points on this in his answer, too). Both of these are super important because sale, fundraising, business development, recruiting, etc. are all dependent on storytelling ability. Founders who communicate a compelling story (vision) are really great at getting people to come along for the ride.
Impressive understanding of buyer psychology. Consumers of goods and services rarely buy them for entirely rational reasons; rather, the vast majority of human decision-making is emotional. If you can convey a deep understanding of why people feel compelled to buy your product (especially when tied to universal human emotions like fear, jealousy, greed, or lust), you'll come off as a truly believable chief salesperson and team captain.
Conversational voice and tone. Confident, practiced founders give off the impression that their companies are going to succeed with or without the investors' involvement. Stilted, panicked founders can seem unprepared and desperate. Deliver your presentation with the same calm and nonchalant (but also sincere) tone that you would use to chat up somebody cute at a bar.
Lack of defensiveness when it comes to the company's weaknesses. This doesn't mean “be super open to coaching from the VC and submit unconditionally to their authority.” It just means that when the investor points out some of the more challenging or difficult aspects of your business, acknowledge them as areas of concern. Don't fight every single point. There is no perfect business. Companies that appear to have no warts scare VCs because they beg the question: What am I missing here? Better to admit to the problem and challenges, or even better, lead the investors directly toward them: “Now, because of the nature of our business and the way we're attacking the market, we're weak in areas A and B, but we aren't too worried about that because the opportunity in being great at X and Y is so much more valuable, and we believe it makes much more sense to emphasize our strengths than to obsess over mitigating each and every weakness.”
Demonstrated resourcefulness. Leo Polovets covers this well in his answer. Did you accomplish a lot with a small amount of resources? Saying anything akin to: “We would have accomplished ____ if only we had more money,” is bad, bad, bad.
Appropriate understanding of what a healthy company or investor relationship looks like—not overly deferential, but not overly standoffish either. Convey that you're interested in a partnership of equals with complementary but mostly nonoverlapping skills.
CEO takes ownership of all aspects of the company's performance. Never ever say anything along the lines of: “I guess we'll have to see how engineering does on its next release,” or even worse: “Sally, our VP of sales, is in charge of hitting the number, and I hope that she can pull it off.”
A gentle and patient, but firm, ability to set the investor straight when he or she misunderstands something or make a nonsensical suggestion. Paul Cohn covered this well in his answer. Ben Horowitz also has some interesting blog posts about how he intentionally asks stupid questions in pitch meetings because he wants to see how aggressively the founders will set him straight. (More aggressive is generally good because it demonstrates that you've done your homework on your business and that you're focused enough to discard crappy advice from investor-types.)
Additionally, I wanted to add three things that are not especially important (to me, at least) in pitches:
Having an encyclopedic knowledge of each and every competitor. It's really important to understand the industry dynamic broadly, but I really don't care if you've never heard of the umpteenth micro-competitor in your space or know every least detail about all of your 50-plus competitors' strengths and weaknesses. The real question is whether you understand what Microsoft and Google are up to.
How well you deliver the “team” slide. Yes, obviously the team is important. But it's really hard for me to get excited about people who aren't there in the room (unless your VP of sales is Bill Clinton or something). I'm way more interested in how the presenters make me feel than a bunch of bullet points about where your VP of engineering went to college (though Stanford fetishists will disagree with me on that point).
Impressive forward-looking growth projections. Every growth chart in every pitch deck in the world is an up-and-to-the-right hockey stick, and every growth chart in every pitch deck in the world is a lie. That's OK, and you have to do it anyways, but, “We're going to be a $100 million business by 2019!” is not an impressive statement all by its lonesome.
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