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How To Pitch To VCs

David Rose (who I confess I did not know of before watching this video) gives a presentation on how to pitch to VCs.  Rose is the founder of New York Angels and also CEO of Angelsoft, the software platform used by most angel investment groups (and about which I previously blogged). 

Rose starts by listing the 10 characteristics of an entrepreneur that the investor is attempting to assess in the pitch:

  1. Integrity
  2. Passion
  3. Experience
  4. Knowledge
  5. Skill
  6. Leadership
  7. Commitment
  8. Vision
  9. Realism
  10. Coachable

He gives some tips on how you might help the VC favorably assess these qualities.  Then he talks about a few things you should be sure to do during your presentation:

  • Make sure your presentation has a logical presentation
  • Talk about things the investor knows / understands
  • Validate what you say with evidence
  • Establish believable upside in your business

Followed by some things you should NOT do:

  • Talk about things the investor does not know about or understand
  • Say things the investor "knows" not to be true
  • Have internal inconsistencies in your pitch
  • Include typos, errors or other mistakes

In terms of what the presentation should look like he says your slides should ideally be:

  • Short titles with short bullet points
  • Even better, just headlines
  • Or best of all, just images

He then promptly breaks that rule by putting up a slide of the slides you should have in *your* presentation (basically a modified Kawasaki-10, which I’d argue is a better framework):

  1. Logo (first page)
  2. Business overview
  3. Management team
  4. Market
  5. Product
  6. Business model
  7. Strategic relationships
  8. Barriers to entry
  9. Financial overview
  10. Use of proceeds
  11. Capital and valuation

And then to close he has a few tips on how to run the actual presentation:

  • Use "presenter mode" in PowerPoint or Keynote
  • Use a remote control
  • Your handouts should not be your presentation
  • Don’t read a script
  • Never look at the screen

Well, if that summary wasn’t enough for you, you can watch the video with Rose’s tips on pitching VCs (it’s about 15 minutes long) here:

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Categorised as: Venture Capital

  • http://rose.vc davidsrose

    Furqan, you might not have known me, but I’ve been following YOUR writings for some time now [grin]. Which, by the way, I’ve found to be almost always right on target! Thanks for the nice summary of the video. While Guy and I developed our suggested sequences independently (we’ve known each other for over 20 years), you’ll note that they both share the most important feature in common: logical progression. That really is the single most important thing in crafting a presentation, and the one most often violated in the raw pitches I see.

    In both cases, we’re telling you to start out with some baseline education: what is the market you’re in, and what is their pain? Then show us how you solve it, and how you make money doing so on a micro level (that’s the business model). Next is the all-important question of who is going to buy it and pay you money, and how you’re going to reach them, followed by who else is trying for the same market, and why you’re going to win.

    At that point, you’re ready to roll up the numbers to the macro level, and give us your financial projections, based on the important drivers (customers, installations, products, whatever) that you’ve previously identified. Finally, you let us know what you need to make this work, and why you want to work with us in particular.

    The one real difference in the two sequences is where you introduce your team. Since investors like us ‘bet the jockey, not the horse’, that’s often the most significant slide in the presentation. I’ve found that it can go either at the beginning (where I have it in the list) or toward the end (where Guy has it). What tips the decision is the answer to the question: “how crucial is THIS particular team to THIS particular business plan?”

    If the answer is ‘absolutely critical’ (because you are/have the industry leading expert, or someone with important connections or domain expertise), then it should go up front, because it will color (positively) the way the entire rest of the presentation is viewed. But if there’s nothing THAT special (ie, you’re “just” a bright entrepreneur with a good idea, or a solid MBA with general business experience) then it should go at the end, where it simply reassures the investor that you have the competence and skills to be able to executive the plan appropriately.

    If I had to boil the whole thing down to five bullets, they would probably be:

    1) Logical progression!
    2) Photos, not text
    3) Validators are critical
    4) Use a remote control
    5) Never look at the screen

    Thanks again for the review!