A huge amount has been written on this topic, but when it comes down to it only a few things count to get the VC funds you need. Sure you need to find a way in through your network, and then you have to get the interested enough to read your punchy exec summary and then you have to chase them until you have worn your fingers out dialling…then finally they ask you come in!
You need to tell them things they need to make a decision and you need to make a presentation that really makes them think you stand out from the crowd. So that’s get the data provision right and ‘talk’ to them so they choose you against everyone else.
Of course life is not so simple but I am trying to focus on the core things you need, so you don’t waste time on lots of other areas that don’t give you the maximum impact. People buy people, you know that, so when you get a chance you need to make the most of it…
Here’s a simple but useful list on what a VC wants to walk away understanding:
This is a sample of a real request from a VC before a meeting.
OK so you have a great business plan and hard hitting, believable, financials. So now it’s down to the day, you need to blow them off their seats and get them to put your proposition top of the pile.
My personal guru on the subject of VC pitching is Dan Sapp, I have bought his excellent VC Megapitch product, which you can find here: http://www.vcmegapitch.com/.
How do you make the presentation of your life, here’s what Dan has to say about it:
1. Do: Know exactly what you want from the meeting.
Identify one, single outcome for each meeting. Yes, you want capital at the end of the journey but there may be a number of steps to take before getting there. Plan what you say based on that result. For example: you may need another meeting so you can demo your product, or have the VC conduct some initial due diligence, or ask your investors to become referral sources. You can’t plan a journey without a destination.
2. Do: Your homework on the VC.
If you don’t know specifically what they need right now”what makes them want to invest”you can’t identify what you need in order to move them in your desired direction. Of course they need return for their limited partners, but you can go deeper than that. What have they invested in and why? How does your business fit their portfolio? Do your homework.
3. Don’t: Pitch.
Pitches are for baseball players and used car salesmen. You are the senior leader of a dynamic, growing company. Act like one. If you want your company and your plan to look and sound like every other pitch that VC has heard that day, sit down, open PowerPoint and narrate your presentation. Otherwise, facilitate a business meeting that creates value for both parties.
4. Do: Look and sound like a world-class leader.
Like all of us, VCs are influenced by leaders with real vision, power, passion and a willingness to reach out to others. If you don’t look and sound like a world-class leader now, learn how to look like one.
5. Do: Get comfortable with silence.
The more you talk, the less insight you can gain from the other people in the room. Simply pausing (silently, no uhms and Ahhs) at the end of an idea makes room for questions, objections (see next tip), and makes you look more comfortable and confident.
6. Do: Listen for Closing Signals.
If you ever hear a VC say “I want to bring in a couple of partners on this” (even after only five minutes) and that was the result you had in mind consider the meeting over and get the next one on the calendar. You don’t get brownie points for finishing your prepared remarks. You win when you achieve the objective you established at the beginning of the process.
7. Do: Listen for and work to overcome objections.
If they are telling you why they won’t invest and don’t hear the objection, you have gained nothing – no capital and no insight. If you hear the objection and the VC acknowledges that Yes, this is what doesn’t work for us, ask if fixing the perceived problem would increase the likelihood of investment. If so, get another meeting after you fix the problem. If not, find out the real reason and act accordingly. If they are not investing no matter what, end the meeting and find another potential investor.
8. Don’t: Sell your product.
Smart investors are only interested in your product’s functionality out of intellectual curiosity. Other than that, functionality is the last thing on their minds; they are more interested in knowing if your product can drive huge returns. If they are not interested in your business they will not invest. If they are not going to invest, you don’t want them to know too much about your product.
9. Do: Sell your company.
Like it or not, selling your company is why you’re there. If all goes well, at the end of this process some investor will own 40 to 80% of your company.
Your job is to sell it to them based on the return of that equity investment.
10. Do: Close them on something.
A great way to waste everyone’s time is to close the meeting by saying thank you for your time. Everything you say and do should be leading to this point. Now you have to ask that investor to do what you want them to do (step 1). Even if all you get is a commitment for a post mortem on the meeting, move the process forward.
These are just great tips, many of things I have read are different to what Dan says, but when I get into the meeting with a VC I know these rules will set me apart from the rest, especially the point about NOT pitching!!
(I have no connection to Dan and receive no benefit from my article, I just think his products are great value and hit the spot).
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