Pitching Venture Capital Firms

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Information about Pitching Venture Capital Firms
Finance

Published on February 3, 2009

Author: lbobbitt

Source: slideshare.net

Description

Pitching VCs can be challenging.& intimidating. Make sure you are ready. The cliche applies... You only get one chance to make a good impression.

" Pitching 101: "Hey Batter Batter." How to Pitch to Investors for $$$." Lew Bobbitt Entrepreneur / Consultant Contact: Lew Bobbitt on LinkedIn.com iSuds Entrepreneurs Training Camp

What’s It Like Out There… Raising investment for a new venture is a tough full time activity. Much like cold calling for a job! You have to talk to many, many investors to engage ONE. They want to hear about your products or technology, but they are more interested in your market. They will decide whether or not to give you their attention in the first 5 minutes of your presentation. Updated

Raising investment for a new venture is a tough full time activity. Much like cold calling for a job!

You have to talk to many, many investors to engage ONE.

They want to hear about your products or technology, but they are more interested in your market.

They will decide whether or not to give you their attention in the first 5 minutes of your presentation.

The “New” Venture Environment Less confidence Emphasis on customer viability; not just yours. Market windows are unpredictable Less liquidity IPO Market Acquisitions Less time Troubled Portfolios require VC attention Less external pressure to invest Updated

Less confidence

Emphasis on customer viability; not just yours.

Market windows are unpredictable

Less liquidity

IPO Market

Acquisitions

Less time

Troubled Portfolios require VC attention

Less external pressure to invest

What’s the Good News Investors see the value in building companies…not just products. Investment syndicates who invest in Series A reserve more capital for the future rounds. Retaining your team has become less challenging. Expectations are more reasonable these days Investors are looking for new target markets. Updated

Investors see the value in building companies…not just products.

Investment syndicates who invest in Series A reserve more capital for the future rounds.

Retaining your team has become less challenging.

Expectations are more reasonable these days

Investors are looking for new target markets.

Investors want to know… Do you have the right team in place? Experienced and competent management Market, technology, & distribution expertise Can this company be built inexpensively? How capital intensive is your business sector Burn rate considerations How viable is your customer segment? How dependent a is your company on “hitting” a market window? Updated

Do you have the right team in place?

Experienced and competent management

Market, technology, & distribution expertise

Can this company be built inexpensively?

How capital intensive is your business sector

Burn rate considerations

How viable is your customer segment?

How dependent a is your company on “hitting” a market window?

Investors want to know…MORE Is there a clear distribution strategy? Cost of inventory, advertising, etc. Inventory considerations Do you have access to a channel Will you generate at least 50% gross margins Thin margins cannot support investor IRR requirements Thin margins are unattractive to acquirers Where will you be in 5 years? $50 MM? $100MM $200MM? How can your business make a lot of money in this market? Why will customers buy from you? Updated

Is there a clear distribution strategy?

Cost of inventory, advertising, etc.

Inventory considerations

Do you have access to a channel

Will you generate at least 50% gross margins

Thin margins cannot support investor IRR requirements

Thin margins are unattractive to acquirers

Where will you be in 5 years?

$50 MM? $100MM $200MM?

How can your business make a lot of money in this market?

Why will customers buy from you?

Marketing Plans Will you be a market leader? 3% of a $10B market or 30% of a $1B market Has the market been validated independently? Customer references Market research Government reports Are you in a high growth market? Are there adjacent markets? Competition? There is always competition Updated

Will you be a market leader?

3% of a $10B market or

30% of a $1B market

Has the market been validated independently?

Customer references

Market research

Government reports

Are you in a high growth market?

Are there adjacent markets?

Competition?

There is always competition

Pitching the deal Getting Started and getting their attention Humor works great … if appropriate A story is a great second bet Ask a question…engage the audience The Meat – Use facts to back you up Management team experience Market opportunity Competition Profitability Model Barriers to entry / Unique technology Updated

Getting Started and getting their attention

Humor works great … if appropriate

A story is a great second bet

Ask a question…engage the audience

The Meat – Use facts to back you up

Management team experience

Market opportunity

Competition

Profitability Model

Barriers to entry / Unique technology

Pitching the deal Use graphs, pictures, and images to support your facts. Clear, concise, and attention to detail Smile and be confident You are selling yourself You have the passion…they don’t yet. Keep it real Use a conversational tone Personalize your pitch…use “I, you and we” Show them they can trust you Don’t be afraid to say “I don’t know” Updated

Use graphs, pictures, and images to support your facts.

Clear, concise, and attention to detail

Smile and be confident

You are selling yourself

You have the passion…they don’t yet.

Keep it real

Use a conversational tone

Personalize your pitch…use “I, you and we”

Show them they can trust you

Don’t be afraid to say “I don’t know”

10 Rules for VC Meetings 1. Practice your pitch. Get an outside perspective. Practice on your advisors, associates, lawyers, etc. 2. Make sure the team knows who will be in the meeting, how to dress, the time, and directions. 3. Take 20 minutes to prep before the meeting. Discuss strategy and objectives. 4. Memorize your elevator story. 5. Everyone in the meeting should review the following before each meeting: VC Profile – VC website, MoneyTree Venture One etc. Presentation Slides Q&A Updated

1. Practice your pitch. Get an outside perspective. Practice on your advisors, associates, lawyers, etc.

2. Make sure the team knows who will be in the meeting, how to dress, the time, and directions.

3. Take 20 minutes to prep before the meeting. Discuss strategy and objectives.

4. Memorize your elevator story.

5. Everyone in the meeting should review the following before each meeting:

VC Profile – VC website, MoneyTree Venture One etc.

Presentation Slides

Q&A

Rules 6 - 10 6. Appoint a leader for each meeting. If this person interrupts, the others defer. The leader is listening and moving things towards objective. 7. Assign roles for each team member attending the meeting. Everyone present needs to participate 8. De-brief as soon as possible after the meeting and assign action items. 9. If a question came up that was not anticipated or raised a new issue, craft an answer and add it to the Q&A. 10. Follow up with thank you letter/email and with written answers to questions and action item status Updated

6. Appoint a leader for each meeting. If this person interrupts, the others defer. The leader is listening and moving things towards objective.

7. Assign roles for each team member attending the meeting. Everyone present needs to participate

8. De-brief as soon as possible after the meeting and assign action items.

9. If a question came up that was not anticipated or raised a new issue, craft an answer and add it to the Q&A.

10. Follow up with thank you letter/email and with written answers to questions and action item status

Updated NetSuds Entrepreneur Training Lew Bobbitt provides strategic marketing and business development consulting to emerging companies. Prior to founding his own company, Lew was the VP Marketing for SALIX Technologies (Tellabs), VP, Marketing at Mantaro Networks and he has held senior management positions at Lucent Technologies. Lew has also served as an advisor to several venture funded companies, private equity investment firms, and has participated in over $1B in M&A.

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