Editor’s Note: Fund raising is one of the most difficult things a startup founder will do. As a VC, Rich Moran, sees entrepreneurs struggle through this process almost daily. I suspect because it can be an intimidating process — and because funding decisions sometimes seem arbitrary from the point of view of founders — Rich notes that many entrepreneurs he observes take on a “cast-your-fate-to-the-wind mentality” in their pitch meetings. It doesn’t have to be that way, says Rich. He offers some pitch tips below , but first he’s going to share with you what the Pitch Scene — played out hundreds of times a day — looks like from the perspective of the VC.
Sometimes I see them in the parking lot before they come in. I can spy them through my window from an office on Sand Hill Road. It’s a group of three who agreed to meet and they are not sure exactly which building they need to enter but they know they cannot be late. Millions of dollars could be in the balance.
As they talk, there is considerable waving of hands and pointing fingers in that parking lot. All are wearing blazers with no tie and holding Starbucks cups with computer bags slung across their shoulders. I imagine that the conversation goes something like this:
FOUNDER: Listen, I’ve worked with these guys before, they are only interested in one thing: RETURNS. Let me remind them of how much money I made for them before. We are sure to get the money.
CEO: No, let me do the talking. When I was at (Google, Yahoo!, eBay, Microsoft…) I had to give presentations like this all the time. If we are to get funded, they need to hear me talk and explain our vision. I will need you guys to pipe in but I need to take the lead.
CTO: What do you want me to do?
FOUNDER/CEO (In unison): You be quiet unless they have a really technical question.
CEO: Listen, we have only forty five minutes and we have sixty slides. We need to be really focused. So let me lead and I will call on you both if I need you.
FOUNDER: I see a bunch of guys in there wearing ties, do you think we should have worn ties?
CEO: Let’s go in, it’s show time…
At that point, it’s Pitching a Prayer and a PowerPoint. But it doesn’t have to be this way. Here are a few pointers to help with the funding process:
* Let the CEO do the talking. (Sorry, Founder. Sorry, CTO.)
* Time yourself. If the VC firm says you have forty five minutes, they mean it. Going over the time will cut into something else. Unless the VC guys are insisting you stay, you will be penalized for going over. And, don’t be late.
* Start with page twenty one. Don’t spend the first twenty pages of the presentation noting that the Internet is changing the way we shop, eat, breathe and buy. Start with your value proposition, the new thing that you bring to the table.
* The VC firm is cheering for you. You wouldn’t be there if they weren’t pretty interested. Be happy, optimistic and passionate.
* Ask first. Be clear on what you are asking for and don’t save it for the last thirty seconds of the pitch. If you need five million, say so sooner than later.
* Think metaphors. “As Paypal was to eBay, my business is to …..” It can really capture the moment.
Don’t expect a big response at the time of the presentation. More on that in my next post. They will get back to you. In the meantime, debrief in the parking lot afterwards. Just know that we’ll be watching from our office window.
Rich Moran is a Partner at Venrock in Menlo Park. A Silicon Valley veteran, he is also a former Accenture consultant, and the author of five books, including Nuts, Bolts and Jolts: Fundamental Business and Life Lessons You Must Know. Read more from Rich here, and on his blog.