Just thought of sharing this excellent resource for the benefit of all startups that are raising venture funding. This is from Canaan Partners and they have created a kind of a workbook (called a pitchbook) that startups could use for getting their pitch decks in shape. Its almost like a fill-in-the-blanks exercise that everyone understands so well.
The pitchbook lends a structured approach to thinking about funding and how to build up your case for convincing those guys across the table. Different VCs may have different suggested formats, or outlooks they care for… nevertheless once you have been able to marshal your own thoughts, modifying the pitch to suit individual investors may not be far off.
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While on the issue of pitching for VC, I can’t help but bring up Guy Kawasaki’s classic “The Art of Pitching“. This deals with the actual communication style that one should adopt to appear convincing to potential investors (its not focused on the content of the pitch, rather the manner in which it should be delivered). He may not be off target… every idea needs to be sold… and there are numerous examples of good ideas failing to take off because they were not packaged smartly (either to investors or to customers)… take a look below and decide for yourself.
There are so many of these “how to pitch” presentations.
It’s interesting that so many of the VCs make them. How much of their time did they spend making these? How much time do they think it will save them?
If the idea or the service is good enough to invite the pitcher into the office and listen to them, why are they focusing on how many slides there are?
Wouldn’t it only take a minute to say, “Forget the slides, you aren’t prepared to pitch, let’s just talk. Tell me, who’s on the team? … ?”
Just a note to the VCs, the world is changing.
There is an inverse correlation between the number of these how to pitch presentations and the quality of opportunities that are coming to the VCs. The only reason they’d spend as much time as they did on this presentation is because quality of pitches coming to them has gotten so low that they want the pitchers to be more prepared when they come to them.
The only people coming to the VCs anymore are those with not so good ideas.
Seriously, there are enough of these out there that any entrepreneur smart enough to have a good product is going to be smart enough to have a good presentation.
I predict as the need for VC decreases over time, the quality of presenations will decrease because the quality of the entrepreneur seeking VC will also decrease.
The good entrepreneurs aren’t going to need VC for much longer. Technology has changed and in this market, it’s the innovators and the entrepreneurs and the hard working smart individuals and teams who have the power.
Smart VCs should be seeking out potential investments. They’ve had it so easy for so long because it cost a lot to start a company.
The tables have turned. Smart companies are spending their time building quality products, nurturing customers, and concentrating on the business — rather than concentrating on building a powerpoint presentation to convince someone spending someone else’s money that they should spend it on their idea.
No one with a good idea wants to waste all their equity on some VC who thinks they are the one with the power.
Money is easy to come by if you have a product people want to pay for. Customers want companies with good products to survive. They’ll pay you money if you ask for it and you give them a valuable product in return.
And if you do that, VC isn’t so important anymore. These are the kinds of companies VCs should be seeking out.
In the past, VCs could say, “I’m a VC and I have money” and the ideas would come. It’s not so much that way anymore.
An apartment costs $1000 a month. Work for a year, earn your $100,000, put half of it in the bank after taxes and you’ve got 2 years of runway including all the bandwidth, infrastructure and design you’ll need. Focus on a good product and the VCs will come to you.
Interesting comment…I agree with your statement that VCs aren’t necessarily the Key Masters they once were, but I disagree with your conclusions.
If someone comes to me to present, and I conclude they aren’t prepared, I’m not going to waste my time or theirs. Unless their taking the meeting as a personal favor to someone, most VCs won’t invite an unprepared presenter to “forget the slides and have a conversation”. They’ll use the lack of preparation as a sorting criteria, end the meeting, and address the 30+ other proposals that are vying for their attention at that particular hour of the day.
I recently got done listening to about 50 companies looking for funding (amounts ranging from $800k USD – $8.5M USD). Easily 30% of them could not tell me who their competition was, what business or market problem they were solving, and specifically why they were better than certain competitors. All of them could tell me why their technology or solution was brilliant.
There are lots of great deals out there – especially now. If you’re not prepared (on either side of the desk) you will miss them.
You can (literally) have the best technological answer in the world. But if you can’t sell it (i.e. – explain it to someone else), nobody will give you any money – including customers.
Yes, that is a good point. Very good point. Sometimes to stay focused on a particular target I have to be aggressively opposed to some of the other options.
I apologize for the tone.
It is a very good presentation.