Top 10 Pitch Meeting ‘No-Nos’

10 thoughts on “Top 10 Pitch Meeting ‘No-Nos’”

  1. 4. “We have a virtual team.” I disagree.

    Far-flung teams are not the exception these days – many open source projects are successful with teams that have never met in person. Here in the valley I know a number of successful companies whom have a few people here and many more in India, Europe or other time zones. Success is determined more by the experience of the team with the organizational model than the model itself.

    That said, if you have never done it before I would not recommend it for a startup. If you have done it before, it can be an asset.}

  2. I was looking to send a Top 10 list just like this to a young entrepreneur I met recently when he asked me why I won’t sign a NDA.

    Also, I’d like to add:

    Don’t leave a excited pre-meeting voicemail stating emphatically that you have a ‘game-changing, paradigm-shifting deal’ that you’re doing me the favor by letting my invest in it.}

  3. I have a feeling that a lot of people seeking VC funding are too brash in their presentations – if I was a member of a VC firm watching a presentation, I’d be paying much more interest in the actual idea and how well it’s planned, instead of how outgoing and ‘full of beans’ the individual is. In fact, someone who just conveys the information in a to-the-point manner and was polite yet informative would probably interest me more. Sometimes the quiet, thoughtful people, who often take a backseat to the more charismatic people, have the best ideas.}

  4. Sorry Sean, but as a former far-flung team pitcher, I can’t tell you that VC’s generally don’t much like it. For some its a deal-killer, for some its not. I’d say it’s critical the top 2-3 folks be in arms reach, though the rest can scatter farther.
    And it’s not for a bad reason– my CTO and I did part ways, and my new CTO is local. And I can’t say location didn’t play a part in that.}

  5. Having successfully raised $4.9 million in venture/angel funding during the 2000 – 2002 “dry years”, here’s my list:

    Have a clear understanding of your business and be able to articulate what you do in a 30 second elevator pitch. This is real.

    Though the executive summary of the business plan is a synoptic roll-up of the plan, it’s what everybody reads, so make it clear, exciting, and to the point. That said, every element of the plan should have extreme detail and answer questions before they’re asked. This is important because the finance guys will go straight to the financial docs (pro forma) and the business model, the marketing guys will go to the marketing section, the legal guys to the intellectual property protection and contracts in place, etc, etc.

    Be realistic about your differentiation, your risks, your competitors’ strengths, etc.

    Do not say that the financial pro forma figures are conservative or that nobody else has done this or that your idea can’t be replicated by somebody else.

    Be ready to have your estimated revenue cut in half and the expenses doubled and then have it done again…your financial model has to be scalable.

    Have a thick skin, your idea will be poked full of holes, people will trash it, and you’ll hear “no” far more often than you hear “yes”.

    Having an experienced management team, contracts (or letters of intent), strategic partnerships, and a good board of advisors in place now is best. If not, have plans for it. The quality of the management team is the number one reason for funding success or failure (besides actually having a good business idea).

    Clearly acknowledge the “holes” in your current business plan and how you plan to fill them.

    Have a clear path to profitability and an exit strategy for investors (do not say IPO!).

    Ownership interest and voting control don’t necessarily have to go hand in hand. Try not to give up voting control. You will lose majority ownership interest if the funding requirements are substantial (meaning more than you can afford).

    The valuation of your pre-revenue company is the money the current investors will lose if it goes belly up, nothing more.

    Have enough skin in the game that potential investors know it will hurt if this thing goes belly up.

    Do not be afraid to approach the “big boys” in the industry. Having connections within the company helps, but is not necessary. Do your homework, call execs in the company and ask who is in charge of “such and such.” A good way to secure a meeting is to buy them lunch – they have to eat anyway and most don’t mind hearing your ideas if you’re paying for lunch.

    Be ready to change your vision, and in the same breath, be ready to walk away.

    Don’t skimp on the image, have a quality web site and professional materials.

    If a technical project, the most effective route is:
    Prototype
    Pilot
    Scale

    Initially, make a risk and cost free proposition to potential strategic partners. Once you prove yourself, they’ll be willing to assume some risk.

    Don’t do business out of desperation, do business with the people that you want to be wedded to for the long-term.

    What is your brand? What does your company mean to the world? The best way I’ve found to define myself or my company is to describe the “absence” of me or my company. I use Coca-Cola and Microsoft as examples. This is a good way to anchor your vision.}

  6. Love the list, although I disagree with Point 8. What if the question they are asking is addressed 2 slides down? To me pitching is not a lecture but it is like telling a story. And until you reach the end there is always suspense. Most of the times if you don’t build your story well the audience gets bored and wants to skip to the climax.

    Unless you know that the question is not addressed in your presentation I think it should be held off because you would eventually be addressing it.}

  7. I love the list. Having been on both sides of the table (Angel, then Entrepreneur) my one addition would be humility.

    – Expose what you’re bad at, not just what you’re good at.
    – Be candid about risks with milestones
    – Discuss your bets and WHY you’re making them, don’t just list the bets you have to win to get to a milestone
    – Be aggressive in listing competitors. My fundraising deck listed over 100. That really confused investors :-)}

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