Friday, February 17, 2006
What I really like about last night's presentation on "How to make a
great pitch to investors" is that it offer 2 perspectives of business
pitch, that of a CEO and that of a Venture Capitalist (VC). Between the 2
presentations, I find Rana Gupta's presentation more illuminating. Here
are the main points from his presentation:
- Started off by disagreeing with Cary. He jokingly said that VCs are
not the smartest people in the room. If they are so smart, why they
didn't see the Internet Bubble coming?
-
Pitch is like a resume, it's a hook, but it has a story to tell.
- Each point of greatness has to be countered with risk reduction. Don't use the clique "a great opportunity."
- Convey how you have reduced substantial risk in the deal.
- Make investors excited and comfortable.
- Grab the investors by describing the drama of pain. For example, "the market can't live without this."
- State your assumptions on your slide - this often overlooked.
Assumptions cast off the investors doubts and questions by recognizing
what is most variable.
-
Don't splash your presentation slide with corporate icons especially
when you don't have any substantive contact with those companies yet.
Sorry, middle managers and engineers don't count. Only when you have
contacted a decision maker with substantial follow-up can you even
mention that you have contacted that company in your pitch. If you do
have credible contacts, show them on a table (no names please, just
title) and when, including follow-ups.
- A deal has three legs (like a stool), comprising of the team, the
product, and the market. Always build your pitch around these 3
components.
- Don't say we have a patented technology when you haven't even
filed for one or even possess a provisional. Saying patent-pending
isn't great either. Say this instead: "We have 3 provisionals, 1 filed,
and 1 issued."
- State clearly the deal (usually at the end), including the terms and timing. Keep it simple and clear.
- If you have advisors in your team, it is important to tell
them how accessible you are to them. Please if you consult your advisor
only once a quarter, that doesn't count. They have to be accessible to
your enterprise.
- Finally, Rana in defense of all VCs over the world, causally
debunked the fact that VCs are not evil people. He emphasized that VCs
have no collateral on you. They are not giving you a loan, they are
investing. If they lose it they lose it all. Of course, they want to
know about risk. Everything is examined under careful scrutiny.
Therefore, every attribute that you pitch has to have a risk-reducing
component.
Excellent presentation... I really like it.