Quick 3 questions for you !!
When pitching your startup to VC, the investor is trying to answer three questions: why now, why you, and why us. To be convinced they have to have satisfactory answers to all three.
Each of these “whys” actually starts with a “why not?”
¶ For “why now,” the investor’s first question is “if this is such a good idea, why hasn’t it been done already?” A good answer is that some enabler has just now become available. Usually it’s a technology enabler - location services for Uber and Waze, LLMs for Cursor - but it can also be a market enabler, like widespread smartphone adoption for Instagram.
On the other hand, if it’s been possible for a long time and still nobody’s done it, that suggests that perhaps it’s not such a good idea after all. When you say “it’s been possible forever, I’m just the first to think of it,” that sets off all kinds of red flags. Occasionally it may be true, but for an investor it’s a low-percentage play.
🌍The other side of “why now” is demonstrating that all the necessary enablers are in place. For mobile payments to work, you need not only NFC in the phone, but also broad adoption of NFC-capable terminals. The ideal time to move is when the very last prerequisite has just been solved; or, when your company can solve all the gaps that remain.
🌍 For “why you,” again there are two sides, starting with “why not someone else?” We’re looking for unfair advantage. Being smart, understanding your market, committing full-time to the business - these are table stakes; or, put differently, they are necessary but not sufficient. An ideal answer here demonstrates scarcity. “My students and I have been researching this for 10 years and we have an exclusive license from the university,” or “There are only 20 people in the world who really understand this, we’ve already recruited 6 of them, and we intend to go after the other 14 as well.”
🌍 The third dimension is “why us,” which arises mainly when an investor is venturing outside their usual domain. Every investor has an area where they are strongest. Some are extremely disciplined in their focus, while others are willing to entertain interesting ideas a bit further afield. If you’re pitching a space deal to a deeptech fund that doesn’t have specific experience in space, they’re going to ask themselves “what’s wrong with this deal that the space-specific funds didn’t go for it?”
More generally, it’s good if a few investors have seen your deal and passed - we’re all egotistical and contrarian enough to think we’re smarter than the other guy. That said, if a hundred VCs have passed, that's enough to make anyone wonder, do "they" know something we don't?
There’s a famous quote, attributed to Doug Leone: "I make a decision in 30 seconds. I just spend the next six weeks rationalizing it." Often the why now / you / us questions are part of the rationalization process, not part of the initial decision. Still, one way or another, every VC has to get through them before writing a check.
