A Founder Who Just Raised a $3 Million Seed Round Showed Me the New Way Startups Are Pitching VCs

Story by Aaron Dinin, PhD

I recently watched a freshly-minted Y Combinator graduate demonstrate the fundraising pitch she’d just used to raise a $3+ million seed round. It was flawless and wildly compelling. Heck, even though she was just demonstrating her pitch to my class of Duke entrepreneurship students, and even though she’d already closed the round, I was tempted to ask if I could kick in an extra $100k.

To be fair, the company she’s working on has all the the things venture capitalists drool over: an unsexy but large market that’s 20 years behind in the technologies it’s using; a young and brilliant founding team that perfectly understands the market; and a handful of big-name early customers who are so desperate for help that they’re willing to pre-pay thousands of dollars. So, yeah, it’s a great company, too. But companies can be great and still have boring pitches.

That wasn’t the case with this founder’s pitch. As great as her metrics and market were, the reason her round was oversubscribed (and, apparently, it was oversubscribed by a lot), was because of how great her pitch was. It was one of the most interesting and engaging startup pitches I’ve seen in years.

Since watching it, I’ve been trying to understand what made it so great beyond the numbers and traction. The more I think about it, the more I find myself realizing the pitch was great because she’s successfully evolved her pitch structure to align with the viewing habits of modern audiences who have spent the past five years watching TikToks.

Evolving of fundraising pitches

Just like everything else in life, expectations around what makes for a good fundraising pitch evolve over time. A pitch that would have been considered amazing in the past won’t be as effective 20 years later, and why would we expect otherwise? When plucky young entrepreneurs attempt to provide compelling reasons to fund their entrepreneurial visions, different funding environments, different technologies, and different sets of expectations will obviously impact what investors hope to see.

To be fair, most people can understand why fundamental macroeconomic and technological factors impact fundraising. After all, a funding pitch from the late 90s trying to sell a simple ecommerce concept and asking for millions of dollars to buy and maintain servers obviously isn’t going to gain much traction in the days of Shopify and cloud infrastructure. But there’s more to giving a successful pitch than just matching the business environment. A great pitch has to match the media environment.

Simply put, a fundraising pitch needs to be a compelling story. And, like everyone else, an investor’s sense of what’s entertaining and compelling is going to be impacted by the current cultural zeitgeist.

In case you haven’t noticed, the current cultural zeitgeist has shifted dramatically in the past 15-ish years thanks, in large part, to social media. If you were fundraising in 2010, you were fundraising in a world where cable was still king and movie theaters were packed with people excited to spend an entire afternoon watching the first Avatar.

Fast forward to now, and, in the same 162 minutes a person would have spent watching Avatar, the average social media user will watch ~150 videos. Even if you don’t think your typical venture capitalist is spending much time scrolling through platforms like TikTok and Instagram (a tenuous assumption), it doesn’t matter because, whether they realize it or not, they’re still being influenced by the larger cultural trends around them. Understanding these shifts is key to understanding how to give a good fundraising pitch in today’s social-media-dominated media landscape.

The old way of pitching

If you go to YouTube right now and search for “fundraising pitches,” you’ll surely find countless hours of footage from startup demo days. The videos will mostly feature young, well-trained founders giving their best attempts at a compelling fundraising pitch. While, admittedly, I haven’t viewed all (or even a decent minority) of the videos, I’m confident the best ones will follow a similar structure: explain the problem -> share your solution. This structure is the “Meet John” technique because, in lots of pitches, you’ll literally hear founders start with the words, “Meet John.”

John, of course, isn’t a real person. John (or Sally, Suzy, William, whoever) is a stand-in for the representative potential customer that has whatever problem a startup is solving. By starting with “John’s story,” entrepreneurs are giving their audiences the necessary context they need in order to understand why their products are valuable and worth investing in.

That structure made tons of sense when most of the stories we encountered were longform stories about “other people.” You’d read a novel written in third-person perspective about a boy-wizard named Harry Potter, or you’d watch a movie about an egotistical but loveable billionaire who called himself Iron Man, and you’d get sucked into those narratives by having empathy for the problem the hero was trying to overcome.

While those types of third-person, heroic narratives are still popular, they’re not nearly as common as the stories people tell about themselves on social media.

The new way of pitching

On social media, creators share their lives and their stories. To be clear, I’m not suggesting social media creators are selfish or only care about themselves. I’m just pointing out that the primary narrative structure of social media is a semi-first-person perspective where we, as audiences, are emotionally investing in the creators we watch and what those creators are trying to accomplish in the world.

Since social media and “creator culture” has become enormously popular, it makes sense that the narrative structures of social media would start seeping into fundraising pitches. This is the phenomenon I noticed in the amazing pitch from the Y Combinator alum I referenced at the beginning of this article.

The YC alumn’s pitch didn’t start with any sort of “Meet John” story where she introduced the audience to the customer and explained the customer’s problem. Instead, she began her pitch by sharing the story of her and her co-founder: She explained how she and her co-founder met; then she explained how they discovered the problem; and then she talked about their journey of solving the problem, iterating, getting customers, and so on.

In other words, rather than making the pitch about her customers and their needs, the founder I was so impressed with made the pitch about herself, her company, and her company’s journey.

I realize, on the surface, this shift from a founder talking about the customer’s problem to a founder talking about herself and her journey might seem selfish, but it really isn’t. It’s a simple reflection of effective storytelling in the age of social media.

Social media has trained audiences to connect with the individuals on our screens by watching their personal journeys. Let’s not assign any sort of value judgment to that reality — it’s not a “good” thing or “bad” thing. It just is what it is.

Savvy entrepreneurs — like the YC alum who just raised $3+ million — are recognizing this shift and changing the way they pitch their companies. They understand that, in the age of social media, a good fundraising pitch isn’t about your customer and your customer’s problem. A good fundraising pitch is about you — the entrepreneur — and your journey.