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From the VC side, it looks like this: "LOOK AT ME LOOK AT ME LOOK AT ME! Ok, what do you have? 40 slides that tell me nothing other than you have a big vision
by chris_va 9y ago
From the VC side, it looks like this:
"LOOK AT ME LOOK AT ME LOOK AT ME! Ok, what do you have? 40 slides that tell me nothing other than you have a big vision and if you own 10% of <insert market here> it will be worth a lot."
At this point, VC options are:
1) Hard pass (crazies, maybe 60% of people pitching), but you want them to still refer their friends for better deal flow, so <insert excuse here> that makes them feel better about rejection.
2) Soft pass (30%): maybe they have something, hard to tell without spending weeks figuring out what they really meant, and if the team is even the right team to be solving the problem, much less actually competent. Give them some <come back when> that doesn't ruffle them too much.
3) Next stage of funnel: The 10% that actually got their concept across, explained why they are a good team to implement it instead of the other 10 people you heard with the same idea, and why now is the right time. Enter diligence, and hopefully you can convince the other partners that you aren't crazy by taking a chance on them.
- athenot 9y agoWould it be helpful if a team adds a slide to the effect of "Here are reasons why you might NOT want to invest in us"? i.e. stating the deficiencies we know we have and addressing them head on instead of waiting until reality differs from expectation.
- SmellTheGlove 9y agoI'm not a VC, so take this for what it's worth (nothing) - Self-awareness is huge. You should know the reasons why a VC might not want to invest in you, regardless of whether it ever comes out of your mouth or goes on a slide. If a VC is interested but has concerns, they're going to ask these questions, and you'll be better prepared to address them. It's up to you - and situational awareness matters - whether you decide to speak to these points even if you're not asked.
- fapjacks 9y agoTotally! So just show them you've got situational awareness by taking the initiative without them having to ask.
- Alex3917 9y ago> Would it be helpful if a team adds a slide to the effect of "Here are reasons why you might NOT want to invest in us"? No. Having a list of risks and assumptions you can send folks is good, and shows maturity. But it doesn't belong in the deck, which should be for introducing yourselves and telling your story.
- chris_va 9y agoUsually the better pitches have a discussion on risks/challenges to overcome, and how you are going to use the current VC round to do that (and the timeline, etc). "Big risk item is delivering T tech by D date, requires P person for M months (usually a specific person), who we will hire at time T_1 after getting our funding round" If most of the VC's concerns are on your list of challenge milestones, then they will be more likely to believe the rest of your pitch as being accurate.
- swyx 9y agoI have never pitched a VC but this was surprising. A pitch that requires a specific person who hasn't yet been hired? What if the person is unavailable? This seems to be misleading specificity.
- jonnathanson 9y agoSomewhat common in pitches from seasoned entrepreneurs. It shows they've thought things through, have identified specific individuals they believe they should attempt to onboard post-funding, and are operating as though they actually know what they're going to do right after they get the giant check.
- kafkaesq 9y agoso <insert excuse here> that makes them feel better about rejection. .... Give them some <come back when> that doesn't ruffle them too much. Do you really think these people are that emotionally fragile? That they really can't take (let alone appreciate the value of) a simple and straightforward "No", with metrics and reasons? As in any other context where one hears lines like these -- the only person who's meant to "feel better" after giving excuses like these is the person giving them. The basic message it conveys is: "We're secure. You're not."
- Trundle 9y agoYes, people are often emotionally fragile.
- kafkaesq 9y agoYeah, people are people I guess. Even so - I find the stance "You're super easily hurt / offended / etc" (or as the above commenter put it, "ruffled") - "and I'm not, so I need to do what's best for both of us, and talk down to you" - to be distasteful, on multiple levels.
- gregpilling 9y agoWhat are your thoughts on the need to understand the idea maze of your industry https://youtu.be/GSHg-sLlCAc https://youtu.be/GSHg-sLlCAc