How to pack in a punch on my first date with venture capitalists for maximum impact
Now that you’ve got your start-up going in the right direction with a workable idea, a basic team and a fledgling customer base, you will want to attract VC funding to further grow your business. It is natural to feel anxious about whether you will pass the test or fail. Some of you may already have made a few pitches to some VC’s and were unable to snag their interest.
As a start-up on a shaky boat in choppy market conditions, it is first and foremost your formidable determination to see you through all circumstances which the VC will want to see. There is no way that you can come across as unsure, unprofessional and not worthy of their trust as it’s a long road to success for a start-up. Possessing good communication skills, enough to engage the interest of the VC in the first 30 seconds of the meeting is vital to the path to their funding, as VC’s run on a tight schedule. If you can clearly communicate what your start-up is all about and the value it will add to customers, you’ve made a good start.
Don’t waste time in setting the scene or in making small talk. Launch straight into your background, from which grew the vision, without using the props of grandiose and vague market speak. It is good to express your passion and enthusiasm to show your inner drive. Speak from the heart naturally. It’s is important to sell your dream, to let them know why you are doing what you are doing and that there’s nothing else you would rather do than live this dream.
Now that you’ve got them interested, it’s time to introduce your team. Bring the right people with you for the presentation, who add value to the organisation, are able to speak confidently and play a vital role in your pitch too. Your abilities as a team player and leader will be judged now and whether you possess a capable team or not will be assessed. You have to be clear to them about what value you have, how your team members complement your skills and what you’re missing in your team. It is recommended that you talk about your future hiring plans to focus on your expansion goals.
Before the meeting is fixed, spend time in doing your homework on your own company and the VC you are pitching too. This is the time to sell your product to a VC who needs to be told in clear and simple terms that your company can be ‘big’ one day. So don’t talk about early exit plans or previous interests shown by acquirers. Rather focus your talk around key metrics and financials. As a founder, crisply articulate your KPI’s (Key Performance Indicators) which should be on your fingertips. Then give a clear plan of where you want those metrics to be in a couple of years. Unless you are able to convince in concise terms the potential to capture a larger market base than what you currently have, there will be a decline in the engagement of the VC with your presentation.
It is a good idea to use short, sharp visuals and videos on your product being used by the correct customer profile accompanying your talk, which will stay in the mind longer than just bare numbers. Since your audience (the VC) is not so clued in to your product, it is ideal to give them a real visual connect to make an impact.
Also, no discussion with a VC can be convincing or impressive without talking about the competition. It is a bad idea to pitch your company as the “first” and “only”. Instead, strongly outline who your competitors are, why your company is unique, and how you stand out among your competitors. Confidently state the advantages you have over them. Throw a concrete plan in on how you will outlive such business threats.
So, on this first date with your VC, your objective is to convince the investors that you’ve got the ideas, the strategy, the team, the focus and the ability to deliver the next big thing. Your honest and open approach to the statement of your vision and business will add that extra punch to score points and impress a venture capitalist. Of course, knowing your business inside out will have the maximum impact.