Pssst: 6 things VCs want to see (and don’t want to see) in your pitch

Barb Darrow — Fri, 16 Nov 2012 18:27:20 +0000

Talk about stressful situations: A would-be entrepreneur’s first meeting with prospective investors tends to be fraught. Here are 6 things that venture capitalists really wish you’ll do to make the whole process a lot more productive.

1: Keep it short and sweet.

Verbosity is not your friend. Set the hook in the first 5 minutes or you’ll probably lose them, said Joe Caruso, an angel investor speaking at a Friday morning Unconference panel in Boston. Don’t bring 50 Powerpoint slides. Bring 15 if you have to. The goal of this first meeting is not getting money, it’s getting the second meeting, said Jo Tango, of Kepha Partners, channeling Highland Capital’s Paul Maeder.

2: Be conversational.

Most VCs want a conversation more than an outright pitch. Be interactive and don’t get defensive responding to probing questions. Pushback is critical to this process. Investors want to see how you handle obnoxious questions. Skip the marketing speak, and get to why your idea is important.

3: Don’t name drop.

This is a pet peeve for Highland Capital Partners’ Sean Dalton. It’s like they’re saying “I know everyone but you. Now let’s talk about you.” VCs really just want to get to the point and see your value, not the value of your contact network.

4: Do your homework.

What has this VC firm done before? What are they interested in? Why does your vision jibe with theirs? Don’t pitch every VC in the zip code. Get the best introduction you can — if it’s a lawyer or a banker, the VC knows that they’re introducing you to 50 other funds. Targeted pitches beat scattershot pitches any day. Some funds are one and done — invest once and like the quick exit. Others are in it for the long haul, participate in every round — and take a bigger chunk of equity. Does that suit your plan?

Make sure your LinkedIn profile is up to date and spiffy. They will study it before agreeing to meet.

5. Be honest.

When a potential investor asks why you left a job after a year, tell him. You don’t have to go into gory details but you can say “Hey, we didn’t really get along but I learned a lot from that experience. “If it seems that your idea isn’t impressing the investors, ask what it is about it that fails to excite. You never know if one of the partners in the room is the cousin of the CEO you parted ways with.

Be prepared to talk about your biggest success — and your part in it — and your biggest failure — and your part in that.

6: Embrace ambiguity

If you’re not equipped to deal with uncertainty and the very real prospect of failure (2/3rds of venture funded companies don’t return capital), don’t go this route.

Feature art courtesy of Shutterstock user Keith Bell

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.