What did Pitchr work on before?
Last time around, we were heads down on fixing the fundraising gap for founders with limited access to VC. We spoke with 50+ founders about their current or previous pains with regards to the fundraising process, and we knew we were on the right track in terms of the problem. We were building a fundraising tool for founders to build a comprehensive pitch profile, which consisted of their deck, video pitch, document room and so on.
What went wrong?
After determining we were on the right path in terms of the problem, the second step in the validation phase is determining whether there is an actual business model behind this product. As it turned out, there wasn't a very sustainable one.
Many different business models are used in the matchmaking gap between founders:
- % cut of total funding (which we believe is still ridiculous)
- High up-front cost for access to networks
- Freemium model, with limited useful features in the free version.
All of these business models are not genuinely useful for founders and do not cohere with the overall mission of improving the fundraising process.
Usually, founders are broke (hence the NEED to fundraise). Plus, venture capitalists rarely pay for deal flow (unless it is pre-qualified or comes through warm introductions).
What was the turning point?
We realized after our many interviews with investors and founders that there is another, perhaps more impactful way of solving this problem - namely, through the investor pipeline. While this problem might not be as explicit as the fundraising process is for founders, there sure are a plethora of inefficiencies and pains with regards to the pipelines of venture capitalists:
#1 - 90-99% of their deal flow is cold. Yet only 6% of those cold deals constitute total investments made. Why? Because most of it is thesis-irrelevant and not a fit for the firm they are reaching out to.
#2 - Time is scarce, deal flow plentiful. Manual review and import of data from inbounds is a terribly inefficient process that scales inversely as deal flow grows.
#3 - VC intransparency. Many argue that VC is unfair by design - Pitchr thinks otherwise. We want to challenge the misconception that not every founder should be able to get access to venture capital. Cold deals get cold responses. This means those who might not have a prior network of people in VC are generally much less likely to be funded (and it turns out investors are leaving a lot of money on the table by not appealing more to those founders that are underrepresented).
What does Pitchr want to do about these problems?
First of all, we're here to improve the relevancy of inbound deal flow, so VCs can focus their time on what actually matters - the good fit deals, driving value to portfolio companies, and doing proper due diligence.
Secondly, we want to help automate the tedious, repeated processes. Manual review and data import of all inbounds is a waste of time. CRM APIs enable us to do this with one click. Manually reviewing bad fits deals that is - the vast majority of bad fit deals can be pre-determined.
Third, we want to build the interface investors need to efficiently share deals. Building an ecosystem of VCs with info on their thesis and investment criteria can enable them to share deals they pass on with other where it may be a better fit. Turning cold deal flow into a warm intro thru a beautiful UX is the ultimate way to help founders find the most relevant investors for them as fast as possible.