What Makes a Good Pitch – Mark Suster & Mark Jeffrey (TWIVC #33)

You can view the full Video of ThisWeekIn Venture Capital Episode #33 here. Below, you will find notes for the episode.

Getting the Meeting

Ask for an intro from (Best to Okay):-

  1. From entrepreneurs that are funded by that VC*
  2. Industry Experts (VP at Google)
  3. Lawyers that know the VC
  4. Introductions from other VCs

*Connect with funded entrepreneurs by asking them questions on their funding process.  Directly asking for the intro is a mistake if the person does not know you well.   Don’t necessarily have to go to the founder or the hottest start up in the VC’s investor portfolio. Guys lower on the totem pole and people at less popular companies may be more accessible

The Road Ahead

  1. Meeting with associate/gate keeper and/or partner
  2. A meeting or two in  between with other associates or partners
  3. Decision time – Full Partner Meeting, usually on that Monday

Preparing for the VC Meeting

Before the meeting, get coached:-

  1. Understand the team dynamics within the VC Firm
    • Many firms have a few guys that are pushing things along while other follow.
      • Identify these folks and ensure you have their approval
    • Ask entrepreneurs and lawyers who have dealt with the firm
  2. Understand what each partner wants
    • Who’s the quant that bases his decisions on numbers?
    • Who’s the VC that bets based on the founding team?
    • Lawyers and Associates can help you

Come with:-

  1. Team
  2. Demo
  3. Slide Deck
  4. Business Plan

Team:-

  1. First Meeting – One person if only one VC present
  2. Second Meeting –  Two to Three.  More than that is a mistake
    1. One person should not dominate the conversation
    2. CEO is the quarterback for presentation and questions
      1. Two Peeps – Talking split 65% to 35%
      2. Three Peeps – Talking split 50%, 25%, 25%

Slide Deck (Slides in order):-

  1. Founder basic intro* (school, work exp.)
  2. Problem definition (what is the problem — people don’t have water)
  3. High Level Solution
  4. Detailed Solution and Demo**
  5. How do you monetize (Unit Economics)
  6. Competition
  7. Progress to date
  8. Size of Total Addressable Market (TAM)
  9. Potential future exist***
  10. How much money are you raising (Range is okay)

Other tidbits about the slides:-

  • 10 slides 12 at the max and should last 20 Minutes
  • Mainly for credibility*
  • Detailed Financial Models, Market Research etc go into the appendix
  • Real Demo is almost a must for a web startup but screenshots may also do**
  • Explain that not looking for a quick flip and our goal is to run this for the long-term.  But realistically, here are future possibilities***

During the meeting:-

  1. Park questions during presentations (politely)
    • (Quick Answer, detailed answer after presentation or quick call after meeting)
  2. Find a proxy for support and one or two supporters
  3. Wear a Sports Coat with Khakis or Jeans. Ties not required and no T-shirts

How do they decide:-

  1. Cannot have single partner thats says “Over my dead body”
  2. Usually a consensus rather than a vote
  3. ALL GUT!

Decision is a No:-

  1. Means Go Way
  2. Need to find the balance between annoying and persistent

Other tidbits:-

  • Don’t ask a VC to sign an NDA
  • No one important reads the business plans sumbitted on the website
  • Approach VC who is focusing in your sector
  • Financial Models important (how you make money, how you figured it out customer acquisition cost etc)
  • Milestones list is important
  • Pitch needs to be cohesive and a story
  • Pitch needs to explain a trend and it should be cared about
  • Best Pitch is a conversation
  • Get the VC Talking and keep them engaged
  • People like people that listen
  • Takes a minimum of 3 to 6 months to raise capital
  • VC’s like focus.  They need to see that this is your obsession
  • Proximity matters
    • Go to the big city
    • Go to conferences, if you can’t afford it.  Hang out in lobby.

If you find missing or misrepresented information or information that compliments this summary, please comment.

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