How to Get Venture Funding, page 16

The Art of the Pitch, continued

Remember that slide shows are supposed to be talking points, not literal content. Never give a VC presentation that consists of simply reading a slide presentation word for word.

If your audience sits stony-faced, it is a bad sign. So, questions are good—a sign that you are on the right track, even if the questions themselves are provocative or adversarial. It’s probably a good idea to go with the flow of questions, rather than telling the VC that the matter will be covered later in your presentation.

Having a compelling business idea is the prerequisite. If your value proposition makes sense, then how well—or poorly—you manage your VC pitch can make all the world of difference. In this sense, it is no different from pitching anything that is somewhat intangible, such as a screenplay to an important producer. In other words, you have to have a firm grip on your idea and its ramifications, yet at the same time be able to listen to the input that your audience is providing.

Six Degrees of Separation

This briefing has emphasized the desirability of a personal connection to a VC. The venture capital community will not deny that; in fact there is some pride in it. In truth, it doesn’t come from a desire to be insular.

The attitude is that VCs get many more ideas than they can possibly fund. In the end, what you invest in is people, e.g., management. What better way to screen proposals than to check to see that someone the VC trusts will vouch for the people involved in the new venture?

In John Guare’s play Six Degrees of Separation the point was made that we are all ultimately only six personal connections from any other person. This is truer than you might think. There are almost certainly friends of your friends who are also friends of friends of a VC.

If the thought of going to your friends and asking them to solicit their friends embarrasses you, then, in three words: get over it. In order to build a successful business, you will need to convince many, many people that you have a good idea and will be successful. Most likely, when you start talking with people, they will be glad to help—and request some stock options as a reward!

Another way of going about this is to ask prominent executives and industry figures to join your Board of Advisors. As these people become engaged in your business plans, they may be happy to refer you to VCs that they know. (Naturally, Board of Advisors members should be rewarded with a stock option package.)

Continued next page

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