How To Pitch a VC (or Angel)

How to Pitch a VC Startup Weekend Sao Paulo (# SWSP ) Dave McClure 500 Startups , Master of 500 Hats ESPM, Sao Paulo, Nov 2011 [email_address] / @DaveMcClure

WARNING : this deck is guaranteed to offend , provide tragically incorrect advice, and perhaps get you arrested . so fucking deal with it.

Essential Elements of your Pitch
Elevator Ride (30-sec quick pitch)
The Money Shot (demo)
Size Matters (market)
Nice Number$ (customers + revenue)
SuperHeroes & RockStars (your team)
* note: the above are teaser images… they don ’t really mean anything; they’re just here to capture your attention.

Pitch MY PROBLEM (not YOUR SOLUTION ) Post: “ Your Solution is Not My Problem ”

[Pardon The Blatant Commercial ]

Dave McClure
2001-2009:
Startup Investor: 500 Hats LLC, Founders Fund
Tech Marketing : PayPal, Simply Hired, Mint
Advisor, Angel Investor : 200+ Startups
Conf. Organizer : Web 2.0, O ’Reilly, Startonomics
Stanford Visiting Lecturer : Facebook, Startup Metrics
80 ’s & 90’s:
Entrepreneur : Founder/CEO Aslan Computing (acq.)
Developer : Windows Apps / SQL DB Admin
User Groups : E-Commerce, Internet, Client-Server
Engineer : Johns Hopkins ‘88, BS Eng / Applied Math
GEEK, CODER, ENTREPRENEUR Blogger, Startup Advisor Internet Marketing, Angel/VC Investor

500 Startups Seed Fund Mountain View, CA – Founded 2010
Seed Fund & Startup Accelerator
10,000 sq ft / Silicon Valley HQ
Design , Distribution , Data
230+ Portfolio Companies
Twilio
Wildfire
SendGrid
Viva Real
Co lingo
SlideShare
KISSmetrics

[How to Pitch a VC (or Angel)]

10 Slides to an Awesome Pitch
1. Elevator Pitch
2. The Problem
3. Your Solution
4. Market Size
5. Business Model ($)
6. Proprietary Tech
7. Competition
8. Marketing Plan
9. Team / Hires
10. Money / Milestones
Demo Goes Here Teaser Image Goes Here

10 Slides to an Awesome Pitch
1. Elevator Pitch
2. The Problem
3. Your Solution
4. Market Size
5. Business Model ($)
6. Proprietary Tech
7. Competition
8. Marketing Plan
9. Team / Hires
10. Money / Milestones
Demo Goes Here Teaser Image Goes Here Cu$tomer Testimonial$ “ This Shit Rocks .” The Money Shot: Demo Screen Shots Video Business Metrics (NOT Revenue Projections) AARRR!

1. The Elevator Pitch ( only 30 sec! )
Short, Simple, Memorable:
“ What , How , Why .”
3 key words or phrases
“ Mint.com is the free, easy way to manage your money online.”
No expert jargon… just KISS .
Remember to Have Fun 
(…. when you pitch ------> )

2. The Problem
What is The Problem ? … Make it Obvious .
“ Ouch . Yeah, I have that too…”
Who has it?
“ Painkiller not Vitamin ”
also see blog post:
“ Your SOLUTION is not my PROBLEM ”

Pitch MY PROBLEM (not YOUR SOLUTION ) Post: “ Your Solution is Not My Problem ”

3. Your Solution
Great Products & Companies do 1+ of 3 things:
Get You LAID (= sex)
Get You PAID (= money)
Get You MADE (= power)

3. Your Solution
Great Companies do 1+ of 3 things:
Get you LAID (= sex)
Get you PAID (= money)
Get you MADE (= power)
Describe why your Solution:
Makes your customers Happy
Does it better, different than anyone else
“ NICHE to WIN”
(Customer Case Study can also go here)

[ The Money Shot ]
http://Jing.com
http://ScreenCast.com
http://Flickr.com
http://YouTube.com
http://Scribd.com
http://SlideShare.com
Demo Screen Shots Video
PRACTICE! PRACTICE! PRACTICE!
demo will FAIL -- have a backup (screenshots, local video, interpretive dance)
expect to be interrupted

[ The Money Shot ]
http://Jing.com
http://ScreenCast.com
http://Flickr.com
http://YouTube.com
http://Scribd.com
http://SlideShare.com
Demo Screen Shots Video
PRACTICE! PRACTICE! PRACTICE!
demo will FAIL -- have a backup (screenshots, local video, interpretive dance)
expect to be interrupted
and remember :
The Script is NOT your Slides – The Script is the FACE of your Audience

4. Market Size
Bigger is Better
Top Down = someone else reported it
Forrester, Gartner, Your Uncle

4. Market Size
Bigger is Better
Top Down = someone else reported it
Forrester, Gartner, Your Uncle
Bottom Up = calculate users/usage/rev$
Avg Txn = $X
Y customers in our market
Avg customer buys Z times per year
Market Size = $X * Y * Z annually = a big friggin ’ #
Market growing @ 100+% per year

5. Business Model (How Do You Make Money?)
Describe Top 1-3 Sources of Revenue
Prioritize by Size or Potential
Common Revenue Models:
Direct : ecommerce, subscription, digital goods
Indirect : advertising, lead gen, affiliate

6. Proprietary Technology / Expertise
VCs *really* like unfair advantages:
BIG market lead
experienced team
“ superior” technology

7. Competition (why you ’re better *or* different )
List *all* competitors
Show how you ’re better …
… or at least different
if not better or different then
-> “NICHE TO WIN”

Better or Different . Funny! Shocking !!! Accepted Not Funny.

8. Marketing Plan
PR
Contest
Biz Dev
Direct Marketing
Radio / TV / Print
Telemarketing
Email
SEO / SEM
Blogs / Bloggers
Viral / Referral
Affiliate / CPA
Widgets / Apps
LOLCats
… how do you get customers & distribution ? lots of channels & decisions… choose a few :

8. Marketing Plan
PR
Contests
Biz Dev
Direct Marketing
Radio / TV / Print
Telemarketing
Email
SEO / SEM
Blogs / Bloggers
Viral / Referral
Affiliate / CPA
Widgets / Apps
… how do you get customers & distribution ? lots of channels & decisions… choose a few :
3 Things That Matter / To Measure :
Volume
Cost
Conversion

9. Team
People that get VCs Hot:
Geeks with deep tech experience
Entrepreneurs who have sold companies
Sales/Marketing who bring in customer$

10. Money, Milestones
How Much Money ?
3 Budgets: Small , Medium, Large
What will you do with Capital ?
New Hires (Build Product )
Mktg & Sales (Get Customers / $$$ )
Ops & Infrastructure ( Scale Up)

Financing
Raised $50-100K Seed round Jan 08 @ $1M valuation
angel investors: any notables? invested in other co ’s? other winners?
built initial prototype; functional use with 100-1,000 customers
Seeking $250K-$1M Series A round @ $2.5M valuation
already closed $300K
meetings with 5 other VCs in next 2 weeks
targeted closing in 4 weeks
Use of Proceeds / Product Roadmap / Goals
$100-500K: hire 2-3 engineers, 1 marketing / sales, .5 PT customer support
$100-500K: marketing campaigns & customer acquisition
get to 25K customers, $1M revenue by end of year
estimated break-even in Q4 / 09 @ $100K / month

Additional Resources
Dave McClure :
Startup Metrics for Pirates ( AARRR !)
ZapMeals Sample Pitch Presentation
Master of 500 Hats Blog: “ Greatest Hats ” (top blog posts)
Steve Blank : 4 Steps to Epiphany, Customer Development Methodology
Eric Ries : StartupLessonsLearned
Sean Ellis : Startup-Marketing.com
Andrew Chen : AndrewChenBlog.com
Brad Feld, Jason Mendelson : AskTheVC.com
Aydin Senkut : Felicis Ventures blog
Mark Suster : Both Sides of the Table
VentureHacks.com
StartupCompanyLawyer.com

[ Don ’t Pitch Me, Bro. ] srsly: don’t. fucking. pitch. me. (and don’ t email me either, cuz i won’t read it)

Don ’t Pitch Me, Bro.
1 st : Read my stuff (blogs, decks, tweets).
2 nd : Get a referral from someone I trust .
500 Mentors or 500 Founders
Other Subject Matter Experts
*Not* Your Mom.
3 rd : Be Concise. Don ’t Suck .
Email B E D Y 

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How To Pitch a VC (or Angel)

by Dave McClure on Nov 19, 2011

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