How to make the most of your pitch to a VC

Thanks to a glitch in my Netvibes reader, I got exposed to an old but very useful post by David Cowan on “How to NOT write a business plan“. It sparked me to post on how to get the most out of your pitch to a VC.

The overriding point is that your intention in a first meeting is not to fully explain your business. Its just to get to a second meeting.

You are likely to have around 45 minutes with the VC after pleasantries have been exchanged, laptops booted up and projectors connected. That isn’t long. Resist the temptation to fully explain the intricacies of your technology, or to explain everything you’ve done. Instead, focus on the big “hooks” that will get an investor intrigued in what you’re doing. Most slides take about three minutes to cover, so try to keep your presentation to ten slides, and leave yourself fifteen minutes for questions, and to learn a little about the Venture firm that you’re pitching.

Ten slides doesn’t sound like a lot, but its an excellent discipline that will force you to really crystalize what you’re doing. Its also all you’ll have time for. Its very unlikely that your business is so special that you can’t do this. Its usually more of a comment on you than your business!

David’s post suggests what the 10 pages should be, which I’ll summarize here (but you should read his original post which goes into more detail):

1. Cover slide with complete contact info, and a tagline.
2. A mission statement (that is specific, achievable, but not yet achieved).
3. Team background, including key hires yet to be made.
4. Nature of the problem you address. Emphasize the pain level and the inability of incumbents to satisfy the need.
5. Product overview, including benefits.
6. Elaboration on the technology or methodology you have developed to enable your unique approach. If appropriate, mention patent status.
7. Early customer or distribution progress: traffic, revenue, number of customers/users/whatever, logos, testimonials, other key metrics.
8. Sales strategy. Show the expected channels and cost of customer acquisition.
9. Market size and competitive landscape.
10. Earnings Statement, historical and forecast (including total future financing requirements)

(The Appendix can be as long as you want but shouldn’t be a key part of the presentation – just used to answer questions)

For an internet company, I’d also suggest a live demo. If you’re an internet company seeking a Series A or later and you don’t have a site up (at least in beta) then I’d advise waiting until you do. The technology for most internet sites isn’t that hard or expensive, and its well worth getting something up so that a potential investor can better visualize the product and user experience.

Keep focused on your objective, to get a second meeting, and you’ll find yourself much more “on message” during your pitch.