Archive for March, 2009
The VC Pitch: The inside scoop
Let’s say you started a business and are looking for money to either jump start and/or grow your operation. While working on the widget, finding customers/partners and lining up your team, you also need to find time to put a pitch together to convince the investor community that you are the ONE. The regular entrepreneur doesn’t have the opportunity to be in front of investors (angels, venture capitalists etc.) every day to stepwise improve their pitch. This means they need to bring their A-game to those few occasions. How do entrepreneurs prepare for that?
TIE DC offers great help to entrepreneurs in this type of situation. On a regular basis, executives from start-ups and small businesses are being invited to an event called “The VC Pitch”. At the event they are allowed to test out their presentation in front of a panel of expert judges. In this year’s February event we had an interesting combination of venture capitalists, business executives and entrepreneurs as judges. The presenting companies came from a variety of technology areas: Web 2.0, bio-tech, medical devices and environmental friendly – green - technologies. The presenters each had a 5-7 minute window to make their case (quite the Toastmasters format). Immediately after the presentation, the judges gave feedback for 2-3 minutes.
Here are some general recommendations for putting a VC Pitch together:
1. Outline the value proposition: Why are customers interested in the new product or service? How do they benefit? Why will they be inclined to pay what you are asking for?
2. Describe what makes your company unique: Why is your offering special? What differentiates your company from your competition? Why are you able to compete?
3. Outline how you defend your Intellectual Property: Is there IP in the first place? How well is it protected?
4. Name the key players: Who is making this company successful? What is the background of these key people? What are the key hires you are considering?
5. Explain the funding request: How much money are you looking for? What are you going to do with it? What is the predicted impact on your business?
In general, there is no replacement for confidence. Open strong and accelerate from there. Investors appreciate clarity. Be sure that your planning assumptions are explicit and will survive the back-of-the-envelope test. The judges, who are coming to this event without any personal business interest, are highly efficient in discovering anything that doesn’t make sense at face value. The feedback is direct, so be prepared. However, after talking to all presenters at the end, it became clear to me that everybody appreciated the professional input.
