David Beisel’s Perspective on Digital Change
Seven Common Tactical Mistakes Entrepreneurs Make in their Initial VC Pitch which are Simple to Fix
There are a number of great blog resources out there which offer great advice for entrepreneurs giving their initial VC pitch, most notably Allen Morgan’s Ten Commandments for Entrepreneurs. This is a must-read series detailing the context surrounding and strategy for an entrepreneur’s introductory VC meeting. He summarizes the purpose of this first conversation,
“The goal of your first meeting with a VC IS NOT to get a funding commitment. The goal of your first meeting IS to get a second meeting.”
In the year since Allen Morgan wrote the initial post of his series, I’ve seen many entrepreneurs make a number of easy-to-fix mistakes in their first pitch to Masthead, many which were covered in his posts, along with a few others that were not. In continuing my “Sevens” series (Seven Questions Employees Should Ask Before Joining a Startup, Seven Reasons To Become a Founding Entrepreneur, and Seven Founding Sins), I wanted to enumerate some small but significant tactical mistakes that have been partially covered in the blogosphere, but aren’t completely organized in one specific place (to my knowledge).
As Seth Levine wrote, “Treat capital raising like a sales process.” Keeping that notion in mind, the following are seven common tactical mistakes entrepreneurs make in their initial VC pitch which are simple to fix:
1. Not clearly stating in the beginning WHO the customers are, WHAT problem is being solved, and HOW the company’s product/service accomplishes it. I’ve been in more than a few initial pitch meetings where a half-hour into the meeting I still didn’t know the basic facts of the business. Indeed, there is some benefit to framing the opportunity with context, but an entrepreneur should get to the point sooner rather than later.
2. Not controlling the timing and pace of the meeting. This time is the entrepreneur’s opportunity to shine and his/her chance to communicate. Spending too much time in introductions, small talk, and the name-game detracts from the opportunity to convey the primary message. Likewise, mid-stream questions are helpful and a useful way to allow a VC to understand, but the entrepreneur should proactively balance time spent on less-relevant topics with others that are essential in communicating his/her full agenda. A VC’s mind will wander, but it’s the entrepreneur’s job to refocus the conversation when it drifts.
3. Worrying about the demo/pres that doesn’t work. Murphy’s Law often comes into play more often than not with demonstrations and on-screen presentations. If possible, entrepreneurs should find out if s/he can get their laptop hooked up to a projector in the room before the meeting starts. S/he should always have a backup paper copy if the on-screen presentation fails. And if a product demo doesn’t work, it’s best to try again once, then move on. Wasting ten minutes to attempt to fix whatever isn’t working isn’t helpful.
4. Not knowing who you are talking to ahead of time. Different partners in a VC firm are different. Entrepreneurs should know their audience, and most importantly, how savvy it is about the company’s particular market segment. If the partner involved is on the board of an online ad network, spending ten minutes of the conversation presenting an argument about the explosion of the online spending ad market isn’t necessary. When a meeting is confirmed, it’s best to ask then who will be included in it. This situation may change, but the answer will be a guidepost.
5. Not following up. Entrepreneurs should check in with their primary contact a few days after the conversation. No news isn’t necessarily bad news, but it’s helpful to keep the company top of mind.
6. Attempting to force feedback immediately. It takes a few days for VCs to “process,” consider, and think about what’s been presented to them in the context of what they already know. If there was more than one person in the meeting, they need to take some time to reconvene to assess.
7. Inauthenticity. Entrepreneurs should present themselves and their businesses genuinely as they are. Attempts to “dress up” or “massage” their own individual backgrounds or the current company situation which aren’t a true reflection of reality will be either immediately recognized or discovered later in the due diligence process. Obviously, in any introductory meeting, one should put his/her best foot forward, but never at the expense of the truth.
There are a number of great blog resources out there which offer great advice for entrepreneurs giving their initial VC pitch, most notably Allen Morgan’s Ten Commandments for Entrepreneurs. This is a must-read series detailing the context surrounding and strategy for an entrepreneur’s introductory VC meeting. He summarizes the purpose of this first conversation,
“The goal of your first meeting with a VC IS NOT to get a funding commitment. The goal of your first meeting IS to get a second meeting.”
In the year since Allen Morgan wrote the initial post of his series, I’ve seen many entrepreneurs make a number of easy-to-fix mistakes in their first pitch to Masthead, many which were covered in his posts, along with a few others that were not. In continuing my “Sevens” series (Seven Questions Employees Should Ask Before Joining a Startup, Seven Reasons To Become a Founding Entrepreneur, and Seven Founding Sins), I wanted to enumerate some small but significant tactical mistakes that have been partially covered in the blogosphere, but aren’t completely organized in one specific place (to my knowledge).
As Seth Levine wrote, “Treat capital raising like a sales process.” Keeping that notion in mind, the following are seven common tactical mistakes entrepreneurs make in their initial VC pitch which are simple to fix:
1. Not clearly stating in the beginning WHO the customers are, WHAT problem is being solved, and HOW the company’s product/service accomplishes it. I’ve been in more than a few initial pitch meetings where a half-hour into the meeting I still didn’t know the basic facts of the business. Indeed, there is some benefit to framing the opportunity with context, but an entrepreneur should get to the point sooner rather than later.
2. Not controlling the timing and pace of the meeting. This time is the entrepreneur’s opportunity to shine and his/her chance to communicate. Spending too much time in introductions, small talk, and the name-game detracts from the opportunity to convey the primary message. Likewise, mid-stream questions are helpful and a useful way to allow a VC to understand, but the entrepreneur should proactively balance time spent on less-relevant topics with others that are essential in communicating his/her full agenda. A VC’s mind will wander, but it’s the entrepreneur’s job to refocus the conversation when it drifts.
3. Worrying about the demo/pres that doesn’t work. Murphy’s Law often comes into play more often than not with demonstrations and on-screen presentations. If possible, entrepreneurs should find out if s/he can get their laptop hooked up to a projector in the room before the meeting starts. S/he should always have a backup paper copy if the on-screen presentation fails. And if a product demo doesn’t work, it’s best to try again once, then move on. Wasting ten minutes to attempt to fix whatever isn’t working isn’t helpful.
4. Not knowing who you are talking to ahead of time. Different partners in a VC firm are different. Entrepreneurs should know their audience, and most importantly, how savvy it is about the company’s particular market segment. If the partner involved is on the board of an online ad network, spending ten minutes of the conversation presenting an argument about the explosion of the online spending ad market isn’t necessary. When a meeting is confirmed, it’s best to ask then who will be included in it. This situation may change, but the answer will be a guidepost.
5. Not following up. Entrepreneurs should check in with their primary contact a few days after the conversation. No news isn’t necessarily bad news, but it’s helpful to keep the company top of mind.
6. Attempting to force feedback immediately. It takes a few days for VCs to “process,” consider, and think about what’s been presented to them in the context of what they already know. If there was more than one person in the meeting, they need to take some time to reconvene to assess.
7. Inauthenticity. Entrepreneurs should present themselves and their businesses genuinely as they are. Attempts to “dress up” or “massage” their own individual backgrounds or the current company situation which aren’t a true reflection of reality will be either immediately recognized or discovered later in the due diligence process. Obviously, in any introductory meeting, one should put his/her best foot forward, but never at the expense of the truth.