VC Do’s and Don’ts

Eric Dunn, general partner with Cardinal Venture Capital wrote the following guide for pitching VCs. This was originally posted on AlwaysOn:

Figure out what the audience already knows. If you have included a long market overview in your presentation, but are presenting to an industry veteran, you almost certainly win points for skipping quickly through the overview. Figure out what the audience doesn’t know. Conversely, there’s no rule against giving a brief introduction before starting your prepared pitch: “Just in case you aren’t familiar with the automated test equipment market, let me outline for you the major categories and who the market leaders are….” Then take a few minutes off the cuff.

Explain acronyms and terms of art. Your audience is probably ashamed to ask what the LEAP protocol or the IFX standard is, so unless you are sure that everyone in your audience knows what it means, give them a break.

Track your audience. If you are getting blank stares from the audience, it could mean that they don’t understand, or it could mean you’re belaboring the obvious. Break stride and ask to find out which it is.

Answer questions crisply. It’s better to say “I don’t know” or “I’ll have to get back to you on that” than to waffle with an incomplete or inaccurate answer.

What Doesn’t Work

Unbalanced presentations. Don’t succumb to the temptation to dwell on your personal area of expertise. A dozen slides on the technical attributes of the product, or on the details of the proposed sales organization, is almost certainly too much.

Spelling, grammar, and punctuation errors. Although your audience will cut some slack for non-native-English speakers, there’s really no reason not to get this stuff right.

Math errors. Not fatal, but math mistakes definitely chip away at your credibility.

Hiding the ball. If your CTO is about to resign, you lose far more points when potential investors find out later than if you are up front about it.

Arrogance. Most entrepreneurs have a lot to be proud of, but the best I have seen retain their humility no matter how successful they become.

Selling the wrong point. If the critical question is price performance, don’t spend 15 minutes on channel strategy.

Preaching to the choir. If an investor says “OK, we accept that this is a $5 billion market,” stop! Once you have convinced your audience of a point, you lose ground (for obtuseness) by going on to make additional arguments.

For many entrepreneurs, these suggestions for improving investor pitches will be old hat. But all entrepreneurs should recognize that even a great business can’t shine through a low-quality pitch. Good pitches mean investment decisions are made on the merits of the underlying business, and that’s in everyone’s interest.