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Three iron-clad rules for pitching your start-up to a VC


As a VC blogger, I have tried to avoid the inevitable blog post on “how to pitch.”  First off, there have already been many wonderful posts on the topic including this one by my good friend Eric Wiesen over at RRE and this one by the always insightful Chris Dixon. Some of these were even aggregated in to a single quite useful post by ReadWriteWeb. You can also find a Powerpoint I once gave on the topic here.  Second – and more importantly – I’m quite confident that most aspects of advice on “how to pitch” are not readily generalizable across the wide range of entrepreneurs, start-ups, and VCs that exist in the world. An approach that one VC loves might seriously annoy another. A demo or mock-up might be absolutely essential for certain types of applications and might be a total waste of time for others. Some enterpreneurs do best with Powerpoints, others do much better without them. Some people insist on standing while they deliver their pitch. This used to make me uncomfortable, but I learned that if this is what makes the entrepreneur comfortable – that is the most important thing – and I’ll just concentrate on the information he or she is delivering. Form is important, but the substance of the team, the market, and the plan are far more important. Finally, some of the advice on how to pitch is actually advice on how to live – it’s just generally true in many situations including the VC pitch: tell the truth, listen, do your homework, give respect to competitors, admit what you don’t know, etc. This is critically important advice, but it’s not specific to the VC pitch.

So with those caveats out of the way, over the past few days I’ve been in a series of meetings with entrepreneurs that have finally inspired me to put in my two cents worth of blogging on how to pitch. There is a lot of room for creativity and flexibility in pitching VCs, but I’m convinced the advice below is almost always helpful because these tips are about at creating the right context for a productive discussion.

1. Start by introducing yourself.  This may seem obvious, but it is amazing how often this is not done. Before the person you are pitching to can understand (or evaluate) your business, he/she must know who you are, what your background is, and something about what makes you tick. This is essential for putting other pieces of information in context during the course of the conversation. Even if the VC starts a conversation about something else or starts firing questions at you, you should gently but firmly insist on introducing yourself and your team. The team slide should either be the first slide in the Powerpoint or should come right after a slide with a company description. Almost all VCs will agree that the team the most important element of any VC-backed company.

2. Tell the VC what your start-up does in simple language that any idiot can understand. This might be the single most important tip I can think of. It seems blindingly obvious, but it’s not. In the very beginning – right after or right before the team introduction – you want to quickly and succinctly explain what business you are in or plan to be in. And do it in plain simple English (or Hebrew, as is often the case in Israel). This is essential because your listener needs to understand what you do in order to put the rest of your pitch in context. If the entrepreneur is going on at length about technology trends, market sizes, brilliant advisory boards, or revenue growth – the VC will have a very hard time understanding the significance of what is being said unless its in a context. It’s great that your advisor/angel/partner is the CEO of Vodaphone, but until I know that you are selling software to mobile operators, I will not be able to put that information into the right context and understand its value – nor will I be able to ask intelligent questions about the information you are conveying. My advice is not to build any drama or suspense into a VC pitch. Tell the VC what you do, and then go into greater detail – but don’t keep the VC waiting on the edge of his seat for 30 minutes before you reveal the business plan. Be clear about distinguishing between legacy offerings and the new offering you are raising money for, as this can be a major source of confusion and a huge time-waster in meetings. I want to hear about what you’ve done in the past, but I do not want to waste most of the meeting talking about the wrong product. It’s up to you to focus the VC on the right product – the product you are asking him/her to fund – so the meeting time is well spent. Also – do not avoid clarity because you think the VC might not be excited by the truth. If you make most of your revenue from the financial betting industry – just say so. If you are primarily a professional services operation – just say so. If you are competing with large established companies – just say so. It’s true that many VCs have pre-conceived notions about what is or is not an attractive business – but nothing is as big a turn off as lack of clarity.

3. Tell the VC what your objective for the meeting is. If your goal is to raise $5M from two VCs or a small $0.5M seed round, say so. But that is not always the goal. I often meet with entrepreneurs who are in the early stages of idea formation. They are not really ready to raise VC money, and – in many cases – they don’t have answers to some really important questions. This is absolutely fine, and I would rather meet with a company too early than meet with them too late. Often these are productive meetings that lead to long-term relationships, brainstorming, and, occasionally, investments. It’s essential, however, that expectations get set appropriately. If it’s too early to talk seriously about raising money, you want to make sure the VC knows that you know that. If you’re meeting for the purpose of fleshing out an idea or getting some early feedback, let the VC know. This will free up time in the meeting for the brainstorming and back-and-forth that you are looking for – and it will be position you better for when you come back to raise the real money.

Aside from these broad outlines, I think there are many ways to be successful in a VC pitch. A lot of this is a matter of personal style and the challenges of communicating the specific aspects of your particular business. I’d be more than happy to get to know you and your unique pitching style. Just drop me a line and let’s meet. And yes, that is a photo of Chewbacca pitching. In case you were wondering.


{ 1 } Comments

  1. Carni Yaron | April 20, 2010 at 3:51 pm | Permalink

    Great points
    I would add – speak slowly (don’t swollow words, for you this material is obvious, for most others it isn’t)
    and… most importantly – shut your phone off. And no – Vibrate is NOT off! It is distracting achush shilling…

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