I’ve been “on the other side of the table” at Venrock for only a few weeks, but I have seen enough entrepreneurs pitch us to make a few observations. Here are some quick do’s and don’ts when pitching a VC:
- Make the most of the meeting. If you have been invited in for a meeting, that means you have passed the first filter. In the last few weeks, at least 40 deals have been sent to me via email. This is fantastic, but it is like drinking from a firehose. Every deal deserves a careful look. But so many come in that not all can make it to the next step. There are a bunch of reasons a deal may not turn into a first meeting: too small, too big, too early, too late, wrong space for the firm, idea doesn’t appear to have merit, competitive with an existing investment, etc. If you do get invited to a meeting, this could be your only opportunity to meet with this VC, so you had better bring your A game.
- Bring your A game. These points should be obvious, but trust me, not everyone prepares well. Be sharp, consider bringing one or two of your co-founders or key management team members. Be confident but modest. Bring a presentation. Even if the meeting appears to be casual, you should bring a laptop and your deck. You should have a fantastic presentation: well laid out, logical flow, covers all the most important information (opportunity, market size, product, competition, basic P&L, expense structure, team, technology, capital needs, use of proceeds, capital needed to breakeven) and is easy to read and follow.
- How long? Your presentation should last 30 – 40 minutes at the most. If you can’t tell your story in that amount of time, you haven’t distilled it down to its most important (and backable) essence. Be prepared for VCs to jump in and interrupt your flow. Stop to answer the questions, but then continue. If you get finished in 40 minutes, you leave about 20 minutes for questions and some non-structured dialog, which helps VCs see your personality and start to evaluate your leadership qualities.
- To Demo or Not To Demo. My feelings here (which probably differ VC to VC) is that if the demo is brief and shows something powerful and unique, then go for it. For example, if your demo shows that your tool/product is so easy to use you can demo it in three minutes, then do it. If you demo is highly complex, takes a long time, or doesn’t make a strong point, then leave it at the office. Always a good idea to provide a URL for the VC to take a look themselves. But, if you made it to a meeting, they probably already had a look.
- Set the stage for follow-up. End the meeting by telling the VC where you are in your fund-raising process. For example, “We have met with two other firms and are planning on seeing a few more over the next week. We are hopeful to receive term sheets within the next two weeks.” Or, “We have two term sheets already and plan to make a decision by Friday of this week.” The reason this is important is that VCs can move fast when they need to. VCs have a weekly partners meeting where your deal will likely be discussed (if there is interest), so you will need to wait for that to happen. It’s fair to ask, “When is your next Partners meeting?”
I am sure I will have more thoughts over the coming weeks and months. As an entrepreneur, I know it would have been helpful to understand this process before going in to pitch all those times. Hope you find it useful.