July 17, 2013

How to Pitch a VC: 11 Insider Secrets

Josh Linker  /  Inc.com

Follow these guidelines from a serial-entrepreneur-turned-venture-capitalist, and improve your odds of getting funded.

Having been on both sides of the table–-many times as an entrepreneur and now as a venture capitalist–-I've been witness to hundreds of pitches. I've been inspired and bored; dazzled and disgusted. There are many articles focusing on how to craft your slide deck, but few that really give you the inside scoop on how to behave in your big meeting. I can tell you from 20 years of experience, if you follow these guidelines you will significantly improve your odds of getting funded.

As VCs, we're excited to hear your idea for a breakaway company that can change the world. At the same time, if we have to sit in another buzzword-filled, vague, overly-complex, grandiose, hyperbole-peppered session, we'd rather drink bleach. Here are some tips to help you shine and protect our sanity:

1. Get the talking-to-listening ration right. We want to hear all about your idea, but we get super bored listening to 45 minute monologs in which pitchers drone on and on. Our ADD kicks in and we start to think about paint drying or eating glass. Our meeting should be a dialog and conversational. Make your points quickly and concisely and let us ask questions and join the fun. Suggested ratio: 58.42 percent talking, 41.58 percent listening. OK, you don't have to be that precise, but just do be concise, and remember you are not getting paid by the word.

2. Be curious. We love entrepreneurs who are curious. It concerns us when you don't ask questions or challenge conventional wisdom. We'd rather see curiosity and imagination than a fancy-pants presentation any day.

3. Don't name drop. It's great that you frequently shoot hoop with Obama or attended Harvard, but we'd rather hear about how you are going to improve the human race than all the big-shots you know.

4. Keep so simple a 9-year-old would understand. Confession: we ain't that smart. We need you to convey your idea simply enough for Forrest Gump or my nine-year-old niece to understand. If you can't communicate your idea in two sentences, your customers may not get it either (limited market of brainiac super-geniuses out there). We're more impressed with clear, concise communication than buzzword soup or acronym pie.

5. Have a specific objective. It's okay to say you want us to invest. Heck, we're in the business of backing great entrepreneurs. Come prepared and clearly communicate what you want from our meeting. Think about the exact desired outcome and let us know. Our crystal ball is in the shop so it would be great if you'd just tell us.

6. Don't take yourself so seriously. We sure don't! In fact, we'll probably make fun of you the minute you leave. Have fun, laugh, and be yourself. We love renegade, mold-breaking dreamers much more than dull gray suits and power ties. You get bonus points for making us laugh, especially at our own expense!

7. Defend your assumptions. Its great that you plan to have 11 million users in month three, but please make sure you are prepared to tell us how you plan to get there. You should know your numbers cold, understand the key assumptions and moving pieces of your business, and be ready to defend.

8. Avoid grandiose, absolute statements. You are going to put Facebook out of business... really?? "All" users or "every" advertiser will bow to your will? Wish you could show us how to do that!

9. Tell us the "hard part." Picking out cool colors for your new digs will be fun, but easy. All businesses have a "hard part". Getting customers to pay a premium or attracting top talent. We'll have fun together with the easy stuff, but we want to understand from you what the biggest challenges will be. We can plan the holiday party later.

10. Don't start on Chapter 3. You've been working hard for months on your business, but we're hearing it for the first time. Start at the beginning, not in the middle of the story.

11. Let your passion shine! We love entrepreneurs. Creators. Dreamers. Doers. Renegades. Risk-taking freedom-fighters. We want to hear about your burning desire to solve customer problems and make the world a better place. That's much more fun that hearing about how you plan to flip the business quickly and make big bucks. Passion leads, money follows.

In Silicon Valley, only one in three hundred pitches gets funded. Follow these guidelines, and you'll significantly improve your chances. Not to mention, everyone in the room will have a lot more fun. You became an entrepreneur for a reason. It's time to pitch like one.