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How to pich a VC (by Dave McClure)
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How to pich a VC (by Dave McClure)

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  • 1. How to Pitch a VC aka “Startup Viagra” Dave McClure Founders Fund, Master of 500 Hats Paris, June 2010 dave@500hats.com / @DaveMcClure
  • 2. 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.
  • 3. [Pardon The Blatant Commercial]
  • 4. Blogg Dave McClure er, St Advis artup or Intern2001-2009: e t Ma Ange rkeFounders Fund• Startup Investor: 500 Hats LLC, ti ng l/V C I• Tech Marketing: PayPal, Simply Hired,,Mint nvest or• Advisor, Angel Investor: 40+ Startups• Conf. Organizer: Web 2.0, O’Reilly, Startonomics• Stanford Visiting Lecturer: Facebook, Startup Metrics80’s & 90’s: ER, OD Computing (acq.) K, C EApps / SQL ENEUR• Entrepreneur: Founder/CEO Aslan GE• Developer: Windows PR DB Admin EN TRE• User Groups: E-Commerce, Internet, Client-Server• Engineer: Johns Hopkins ‘88, BS Eng / Applied Math
  • 5. Professional Investments (43 deals, 2008-2010, ~$3M) fbFund REV FF Angel 22 incubator deals 21 seed deals ($850K) ($2M)
  • 6. Personal Investments (26 deals, 2004-2010, ~$400K) oneforty Votizen MyGeng Postling o LinkDex Graphicly EcoMom SiteJabb er Plancast WePay Recurly Networked Blogs
  • 7. 10 Slides to an Awesome Pitch Teaser Image Goes Here1. Elevator Pitch 6. Proprietary Tech2. The Problem 7. Competition3. Your Solution Demo 8. Marketing Plan Goes Here4. Market Size 9. Team / Hires5. Business Model ($) 10. Money / Milestones
  • 8. 10 Slides to an Awesome Pitch Teaser Image Goes Here1. Elevator Pitch 6. Proprietary Tech2. The Problem 7. Competition3. Your Solution Demo 8. Marketing Plan Goes Here4. Market Size 9. Team / Hires5. Business Model ($) 10. Money / Milestones The Money Shot: Business Demo Metrics Cu$tomer Screen Shots (NOT Revenue Testimonial$ Video Projections) “This Shit Rocks.”
  • 9. 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 ------> )
  • 10. 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”
  • 11. 3. Your Solution• Great Products & Companies do 1+ of 3 things: – Get You LAID (= sex) – Get You PAID (= money) – Get You MADE (= power)
  • 12. 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)
  • 13. [ The Money Shot ] • http://Jing.com Demo • • http://ScreenCast.com http://Flickr.comScreen Shots • http://YouTube.com • http://Scribd.com Video • http://SlideShare.com• PRACTICE! PRACTICE! PRACTICE!• demo will FAIL -- have a backup (screenshots, local video, interpretive dance)• expect to be interrupted
  • 14. [ The Money Shot ] • http://Jing.com Demo • • http://ScreenCast.com http://Flickr.comScreen Shots • http://YouTube.com • http://Scribd.com Video • http://SlideShare.com• PRACTICE! PRACTICE! PRACTICE!• demo will FAIL -- have a backup (screenshots, local video, interpretive dance)• expect to be interruptedand remember:• The Script is NOT your Slides – The Script is the FACE of your Audience
  • 15. 4. Market Size• Bigger is Better• Top Down = someone else reported it – Forrester, Gartner, Your Uncle
  • 16. 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 = $X * Y * Z annually = a big friggin’ # – Market growing @ 100+% per year
  • 17. 5. Business Model (How Do You Make Money?)• Describe Top 1-3 Sources of Revenue – Prioritize by Size or Potential• Common Revenue Models: – Direct: ecommerce, subscription, digital goods – Indirect: advertising, lead gen, affiliate
  • 18. 6. Proprietary Technology / Expertise• VCs *really* like unfair advantages: – BIG market lead – experienced team – “superior” technology
  • 19. 7. Competition (why you’re better *or* different)• List *all* competitors• Show how you’re better… … or at least different if not better or different then -> “NICHE TO WIN”
  • 20. Better or Different. Funny!Accepted Shocking !!! Not Funny.
  • 21. 8. Marketing Plan… how do you get customers & distribution?lots of channels & decisions… choose a few: • PR • Email • Contest • SEO / SEM • Biz Dev • Blogs / Bloggers • Direct Marketing • Viral / Referral • Radio / TV / Print • Affiliate / CPA • Telemarketing • Widgets / Apps • LOLCats
  • 22. 8. Marketing Plan… how do you get customers & distribution?lots of channels & decisions… choose a few: • PR • Email • Contests • SEO / SEM • Biz Dev • Blogs / Bloggers • Direct Marketing • Viral / Referral • Radio / TV / Print • Affiliate / CPA • Telemarketing • Widgets / Apps 3 Things That Matter / To Measure : 1. Volume 2. Cost 3. Conversion
  • 23. 9. TeamPeople that get VCs Hot:• Geeks with deep tech experience• Entrepreneurs who have sold companies• Sales/Marketing who bring in customer$
  • 24. 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)