An Introduction to Pitching Investors. How To NOT Write A Business Plan. Entrepreneurs often ask me for a sample business plan they can use as a model for their fundraising efforts. They are surprised when I send them a powerpoint file. It's always a good idea to put down on paper your plans for the business, so that your team can build consensus around objectives and metrics. Make it as thick and wordy as you like (though show some restraint--over-modeling the future only wastes your time). I'm sure that Brad Feld's upcoming series on business plans will become the authoritative online reference for this kind of internal operating document.
But my advice is to never send a document like that to a VC. Keep in mind that you are not alone--entrepreneurship is thriving around the world. The Pile is a dark, evil tower--impervious to attack--that looms over every VC's desk. That's why nothing slows down a VC as much as a comprehensive business plan. I was first exposed to this notion in 1995 by a super smart CEO, whose name I regretfully forget. 1. 2. 3. 4. 5. 6.
The 10/20/30 Rule of PowerPoint. I suffer from something called Ménière’s disease—don’t worry, you cannot get it from reading my blog. The symptoms of Ménière’s include hearing loss, tinnitus (a constant ringing sound), and vertigo. There are many medical theories about its cause: too much salt, caffeine, or alcohol in one’s diet, too much stress, and allergies. Thus, I’ve worked to limit control all these factors. However, I have another theory. As a venture capitalist, I have to listen to hundreds of entrepreneurs pitch their companies. To prevent an epidemic of Ménière’s in the venture capital community, I am evangelizing the 10/20/30 Rule of PowerPoint. Ten slides. So please observe the 10/20/30 Rule of PowerPoint.
Startup Viagra: How to Pitch a VC. Master of 500 Hats. From Istanbul To Sand Hill Road: Pitching to VCs. The O'Reilly Web 2.0 Conference starts tomorrow, and I am looking forward to meeting entrepreneurs and getting new ideas. The days following a conference like this is usually filled with meetings with startups that I've met at the conference. The pitches I see have a few golden nuggets in them, but more often than not a few key elements are missing. This time I am attaching what I call a 'great VC pitch'. It's 14 slides and touches all the important aspects of any business that the entrepreneur needs to think of. But I don't want to give these slides in a vacuum. Slide 1: Mission Statement This is the one liner of the company that describes what it's doing. What the VC is Thinking: "Why should I be interested in this? " Slide 2: Market How big is it and how fast is it growing? What the VC is thinking: "Can I build a billion dollar company?
" Slide 3: Problem How big is the customer's problem that you are solving? What the VC is thinking: "How good will my gross margins be? " Slide 5: Team. Fail: 12 Ways To Blow Your Investor Pitch. 5 Quick Tips on Pitching Angel Investors and Venture Capitalists. Lately, I’ve been doing a lot of pitching to investors, including angel investors and venture capitalists.
It’s a fact of life when you run a venture-backed startup. It’s one of those things that no one ever tells you about raising money — once you start, you never stop. It will take on average 4-6 months to raise money, so when you raise an early seed round (say in the $250k-$500k range) it won’t last long. That means the minute you cash that check, you’re out there again, raising more.
I’ve written about pitching investors before. Tell Your Story Quick. Side note: Don’t be afraid to play around with font sizes, colors and typefaces for things like slide titles. Pitching investors is hard. I’ve met very few people who are really comfortable with it, and fewer still that enjoy it. Presenting Financials to Venture Capitalists. What’s the best way to present financials to venture capitalists? You don’t want to pitch VCs with full-blown financial models. Venture capitalists assume your financials are pulled from your backside, totally fabricated, and based on wild assumptions. On top of that, you’ll probably tell them that your financial projections are “extremely conservative” which they’ve heard a hundred times over. My new startup, Standout Jobs is in the process of seeking financing. It’s not the first time I’ve been involved in raising money, but it is the first time I’ve been this actively involved, and the learning curve is significant. Much of my breakdown below is based on the processes we’re going through now alongside our advisors. 1.
If you’re raising $10,000 from friends & family this isn’t necessary, although it’s a good exercise to go through no matter what. You’re not going to show the VCs your financial model, but it serves as the backdrop for what you will pitch them. 2. 3. 4. 10 Questions Venture Capitalists and Angel Investors Are Going To Ask. When raising money from venture capitalists or angels, you’ll want to meet as many as possible. They won’t all invest, but each time you pitch, you get better. Each time you pitch, you get asked different questions, get different opinions and ideas. It’s worth it to pitch as many people as you can, as often as you can. Wil Schroter says it perfectly, pitch everyone, all the time. Some questions will get asked over and over. And you’ll discover those patterns quickly enough and adjust your pitch accordingly. With that in mind, here are some of the more common questions investors will ask: So what’s your business all about?
Although there are common questions you’ll get from venture capitalists and angel investors, what’s more fascinating is that each investor will ask different questions. An Introduction to Pitching Investors.