Y Combinator’s Michael Seibel - How to create a great startup pitch?

Creating a Clear Startup Pitch

Michael Seibel’s core advice is to make a startup pitch simple, concise, and specific. Founders should be able to explain their company clearly and make a direct ask when fundraising. Long pitches create more opportunities to confuse or alienate an audience.

Pitch Frameworks

30-Second Pitch: Three Sentences

1. What the company does: Explain it in plain language, assuming the listener knows nothing about the industry. Use the “mom test”: Could your mom understand the sentence? Seibel’s example is describing Airbnb as a service that lets people rent out extra rooms—not as a “marketplace for space.”
2. How large the market is: Give a researched estimate of the relevant industry or market. For example, an Airbnb pitch could refer to the hotel, vacation-rental, or online hotel-booking market. The goal is to show the potential scale of the opportunity.
3. What traction you have: State concrete progress, such as sales, revenue, users, or growth. If the company is pre-launch, show a fast timeline from starting work to beta to product launch.

Two-Minute Pitch: Four Additional Components

• Unique insight: In two sentences, explain what the company understands that competitors or major players do not. This is the pitch’s “aha” moment. If the listener already knows it or cannot understand it, refine it.
• Revenue model: State plainly how the business will make money, such as through advertising, direct sales, or in-app purchases. Avoid listing speculative options; clarity is more persuasive than presenting several untested monetization strategies.
• Team: Briefly cover the founders’ relevant accomplishments, team size and skills, how long the founders have known one another, and whether they work full-time. Seibel suggests two to four founders, ideally with at least as many engineers as business-focused founders. He also says it is helpful if cofounders have known one another for at least six months. Highlight impressive, relevant achievements rather than padding the pitch with unrelated awards or credentials.
• Fundraising ask: Be prepared to state whether the raise is a convertible note or SAFE, the SAFE’s cap if applicable, the amount being raised, and the minimum check size. Use the relevant terminology accurately instead of vaguely saying that you are “raising some money.”

Actionable Recommendations

• Keep the 30-second pitch ready for any audience, from potential investors to friends and family.
• Use the two-minute version when someone wants more detail, such as a prospective investor, employee, or key partner.
• Practice each component so it is understandable and concise. Avoid jargon except when specifying fundraising terms.
• Be direct about the business model and team. Overexplaining weaknesses or presenting uncertain ideas as settled plans can undermine credibility.
• Demonstrate startup execution speed. For example, a company might say it launched in January and is growing 30% month over month. This is an illustrative example from the talk, not a reported company result.
• Seibel mentions that fundraising timing and investor-meeting setup are topics he intends to cover, but the provided subtitles do not include those details.

Metrics and Targets Mentioned

• Illustrative growth metric: 30% month-over-month growth.
• Market sizing: Research the relevant market; no specific market-size figure or target is provided.
• Team guidance: Two to four founders; ideally 50% or more engineers; ideally at least six months of prior acquaintance among cofounders.
• Pitch length: 30 seconds for the core pitch and two minutes for the expanded pitch.

Presenter/source: Michael Seibel, Y Combinator.