Posted by Anonymous on 2007-07-29
If you are looking at venture funding for your first round, I would suggest that you consider an Angel round first. Why" A friend of mine just got early terms to raise $1 MM for 40% of the company in their first round of funding, and it was a preferred round with all of the standard VC protections. This seems fairly aggressive for a new company with bright prospects.
There are great angel networks throughout the world that will offer MUCH more reasonable terms, and, depending on the investors that you attract, you should be able to secure the necessary advice and counsel on business decisions. You can always save the venture round for later, if needed. Members, read on for some concrete advice...PRIVATE: Members Only (1601 Characters)
Posted by Anonymous on 2007-03-31
Do not deal with associates in the early part of your pitching process. Identify at least one key partner to be your conduit into a funding source. Associates are important to have engaged later in a deal cycle. If a partner is not present on the early calls, assume that the fund is doing competitive research in a sector. This is a waste of your time.PRIVATE: Members Only (325 Characters)
Posted by KipMcC on 2009-08-26
Recently, I shared this outline & pitch deck example with the Capital Factory companies in Austin, Texas; you may find example slides, download the PPT template file, and read descriptions / discussion for each here:
1. Title Slide
* The get everyone in the room and sitting down slide; Don’t roll forward from here until you have everyone in the room and paying attention if you can help it.
2. Agenda + Company Overview
* Make sure you’re covering what they want to cover; ask if you’re missing anything before launching into the pitch
* This is also the slide to give a quick summary of your company. This summary is important because it will give any other partners at the firm you talking to a “snap shot” of you’re company after you’re gone; it’s helpful for other partners in the firm to have at-a-glace info on what you do, in what market, company details, and so on.
3. Market + Market Context
* Why is your market interesting? Are there any compelling dynamics currently at play?
* How do you fit in? This can help set up your unique competitive advantage / “secret sauce” slide.
4. One-slide company overview: THE SLIDE
* In many cases, your entire pitch will be an interactive conversation while sitting on a single slide; this should be that slide.
* Done right, this allows you to describe what you do, who you do it for, why that’s important and your vision for the future.
5. Business Model; How we make money
* How, exactly, does your company make money? Do you have any examples of this working so far?
* Does any part of your business act as a “loss leader” for another, more valuable part?
* Do you have two models running simultaneously? is that good or bad & why? Make sure you clearly describe and delineate between them…and hopefully describe how they benefit and support each.
6. Progress, Mile stones, look into the future
* What you’ve accomplished so far?
* What you plan to do in the near future? In what timeframe?
7. Competition & your company’s “Secret Sauce”
* You relative to others in your space.
* The question that you must answer well: if your company is successful, how will you defend its business from competitors who see your success and want some or all of it for themselves? What can you do differently? What can you do uniquely and realistically for how long? What CAN’T (or is really really hard to) be duplicated? What is your special tech, model, process, team advantage or unique solution?
8. Current Partners, Customers & Pipeline
* Who are you working with today? Who will be your customer tomorrow?
* How, exactly, do you acquire customers? How much does it cost to acquire them? What is your average deal size? How could your business increase the average deal size? What is the average deal size of other companies in this same market? Does this information align with the Market Size / Market Context data from Slide #3 ? (hint: it should) Once you have a customer, can you sell them MORE stuff more easily? Why / why not / how much / when will you have it to sell? What is the expected life-time value of a customer (be careful to think about this relative to the cost to acquire a customer)?
9. Financial Details (revenue, expense, HC, projections)
* What is your current and future headcount (this equates to your burn rate as headcount is almost always the biggest expense)?
* what is your current monthly/quarterly burn rate and how does that ramp over time?
* what is your current revenue and how does that ramp over time?
* How quickly are you approaching a cash-flow breakeven point?
* What’s your revenue run-rate 12 months from now? What’s the net loss / gain over the same period?
10. Funding “ask” + use of proceeds (timing, other firms)
11. Team Overview
12. Thank you, questions, contact info (no example slide)
* Create your own deck! Create a deck that allows you to tell your story according to your style; name the slides what you want; tell your story with text or pictures (within reason)
* Don’t leave out critical information! This outline is my suggestion of a “critical information” list; no rational investor will fund your company without knowing the information suggested by this outline.
* Proactively answer big-ticket questions! If there are obvious, elephant-in-the-room sort of questions regarding your business: address them before they get asked. This is always a better way to go.
* Be passionate and informed! Investors invest in the team – show them your passion and be sure to know data from adjacent or competitive markets, companies, and models.
* Finally, it’s really important to have enough white space in your presentation format. I like a white background because it prints and projects cleanly. I like titles that are single-line and as few words as possible; and I try to keep the text/image area “middle part” of the slide as open as possible. In general, right angles are easier to make look clean than circles but your mileage may vary. Less is more when it comes to the presentation template.PRIVATE: Members Only
Posted by zip on 2008-02-01
The thing I read over and over on this site is, "He never wrote me back!" or "He didn't call me back!" Let's face it, if you're going to to deal with VCs, you have to play by their rules. Many VCs are not great about getting back to folks when the decision is "pass" or "maybe." So, when some VC doesn't get back to you right away, chalk it up as a "pass" or a "maybe" and move on. If they get back to you belatedly with a "yes," be surprised and enjoy the moment.PRIVATE: Members Only
Posted by Anonymous on 2007-05-09
Tags: Pitching Presentation Model
Too many entrepreneurs fall into the trap of being so enamored with their technology or widget, that they spend 55 minutes on how great their technology platform is, and only the last 5 minutes on how they are going to monetize it. Of course, there are always exceptions, but given time and resources (cash) your technology CAN be duplicated, and if it's a good idea, count on it. You stand a better chance if you split up your pitch into two sections, 1. technology and 2. business model. Take the time to be as much of an enthusiastic expert in your market segment as you are on your technology platform. Bottom line, VC's want to know how you are going to make them rich, period. Miss this vital point, and you immediately lose their interest.PRIVATE: Members Only
Posted by Anonymous on 2009-04-17
Posted by Anonymous on 2008-10-30
Tags: Pitching Presentation
Posted by Anonymous on 2007-12-03
Posted by Anonymous on 2007-10-29
Posted by Anonymous on 2010-06-16
Tags: Pitching Introductions Partners
Posted by Anonymous on 2009-10-09
Posted by Doe on 2009-03-08
Fellow entrepreneurs, most VCs are unable to complete capital calls and, therefore, are unable to make new investments. This includes everyone from name brand funds to small funds, and it does not matter if they recently closed a new fund or not. If you are pitching a venture fund, there are two critical pieces of information that you need to know before wasting time with meetings, diligence, and faux terms:
- First, has the fund made an investment in a company that was not already in the portfolio in 2009, and, if so, which company?
- Second, has the fund completed a successful capital call in 2009?
Is the answer is 'no' to either of these questions or the fund is uncomfortable discussing these matters, then don't bother pitching them and move on. Why? Between the dismal exit history, defecting LPs, worthless secondary markets, and massive position devaluations, venture firms are facing an apocalypse right now. The whole concept of 'venture capital' as an asset class is being re-evaluated by accountants worldwide, and the outcome of that work does not look good for venture capitalists.PRIVATE: Members Only
Posted by Mr. Smith on 2008-11-03
Traction is the buzzword of fundraising these days. It is required by many, and understood by few. Here is an attempt at defining traction for all parties in the fundraising cycle.
1. The Idea: How strong is the fundamental idea and underlying revenue model" Does it make complete sense, and is it backed up by published industry data"
2. The Team: Have you assembled a group of domain experts that can execute the idea and the model" How seasoned are the experts that you have assembled"
3. The Prototype: Do you have a prototype of your offering that is compelling to the target audience" How polished is the prototype"
4. The Launch: What is the reaction among trade journals and other media outlets regarding your product launch" Is it well covered and well regarded"
5. The Adoption: How many target customers have adopted your offering and is the growth rate substantial" Are you experiencing a high level of customer satisfaction or a concerning level of churn"
6: The Revenue: Have you started to derive revenue from your offering and is that revenue either ahead or behind or model assumptions" What variables have changed from your assumptions"
7. The Profitability: How profitable or near profitable is your model once in operation, and are there untapped revenue opportunities for future revenue growth"
8. The IPO: How long until you can take your company public, assuming two years of fast growth, audited financials, and profitability or near profitability"
Most venture capitalists, for better or for worse, tend to invest in phases 4 and 5. VCs like the potential upside without the too much details from phase 6, though many investments occur at the start of phase 6, before any details can be conclusively determined. Any other thoughts"PRIVATE: Members Only
Posted by Mr. Smith on 2008-07-27
A lot of new entrepreneurs start pitching venture capitalists or angel groups and rejected over and over again, myself included. Entrepreneurs hear the same criticisms across dozens of meetings, which is discouraging. In some cases, you may even have second thoughts about your business, but, before you reconsider your model, consider what is going on.
First, investors use the same critical reasoning for different businesses in related industries as a way of saying "no" politely. For example, with online advertising businesses, your site is not sticky enough. With subscription business, conversion will be too low.
Second, investors are not operational or modeling experts, so their opinion on your business is worth as much as you pay for it: $0. They are experts at convincing entrepreneurs to give them a large portion of a company and the control for the least amount of money.
Third, investors say "no" many times per day, so they are very good at doing it without revealing the real reasoning. Reasoning rarely has anything to do with a model, but it usually has to do with (a) partner personality matches, (b) firm investment focus, (c) other investments by the firm, (d) sector heat, and (e) control.
In general, a new entrepreneur pitching a business should expect to hear "no" between 30 and 60 times before receiving investment. Each "no" meeting can be an opportunity to get closer to a "yes" by learning which aspects of your pitch generate the confusion, resistance, and questions. With each additional meeting, your pitch should get shorter and better. Don't give up. Be Strong in the face of "Trained Skeptics."PRIVATE: Members Only
Posted by Anonymous on 2008-03-08
I raised $40m from top tier VCs 6 years ago and am now raising money again for another startup. While initially rusty, I quickly remembered how much of a game this is. Recently I spoke with 3 first time CEO who are raising money for the first time. Here are my 2 cents on a few items. I'm interested in others thoughts.
1. DO NOT leave or email your presentation. you are only educating them on your category (not your job) and informing your competitors. As CEO of a VC funded firm, I always was emailed the presentation of any competitor. IF they insist on seeing presentation before mtg, then they are not interested. All the top guys know this and thus take notes during the meeting. IF they are not taking notes during your meeting and still ask for prez, then they are not interested. DO send them some material to spark interest - founding team resume, paragraph overview, perhaps article about customer pain.
2. First 10 minutes are most critical. Yes, its very hard to get meeting, but once you have meeting, you need to QUALIFY and CONNECT with the partner in the first 10 minutes. Qualify by finding out how much they know about category and space. Connect with him or her personally (without .ppt on). Resist natural inclination to firehouse .ppt since you only now have 45 minutes. The ONLY purpose of the first meeting is to establish interest to have a follow on meeting. If they don't see enough promise in your team and market opportunity, then they will not fund deal and you need to move on.
3. Beware the "Head fake" to learn. "Yes, yes, this is VERY exciting. We want to do this deal." You get excited, send them your research and customer contacts, and they now have learned everything you learned on your dime. Deal excitement then dies. Instead, given them 1-2 very specific items of homework (perhaps contacts for you on due diligence, MAYBE 1 customer contact late in the process). Be constantly giving them homework and watch their _actions_ and not words.
4. Do not serialize pitches. Schedule as much presentations during same 2-3 weeks to generate excitement and interested. The #1 thing to get these guys to move or to pass is another firm putting down term sheet down or seriously looking at deal.
5. Don't forget - 90% will never say no. Pitch, given them homework, then move on. If they are interested, they will find you. It's in their financial best interest to keep as many deals open as possible (yes, this is incredibly frustrating for CEOs but it's the way it is).
6. Keep raising money until money is WIRED. Plenty of deals going south (yes even at top tier firms) before money is wired. Smile, but only believe money being wired.PRIVATE: Members Only