1. How NOT to get the Venture Capital Door SLAMMED in your face Diana Benedikt, Principal + our partners at 1
2. Why Learn From Me? VIA: Entrepreneurial Advisory Firm Worked with 125+ startups across: Enterprise SW/Saas/Cloud Wireless Communications Digital Media Clean Tech Consumer Goods Former COO venture funded startup Advance Ventures, Artemis Ventures 2 Success? Failure? Iโve seen it all.
4. DONโT Create Financial Nightmares A situation where financial forecasts were just too aggressive. Other situations occurred where model wasnโt detailed enough. Know your โFinancial Leversโ. Explain clearly & simply, what drives your business. Bonus: support assumptions with actual metrics. 4
5. DONโT Rely on the Live Demo Load a video on your hard drive, play the demo if needed. Or use screen shots. Or printouts. A situation where the demo fails during the pitch meeting. Result: Absolute Failure. Source: Chrisparillo.com Have multiple contingency plans if your demo fails. Be able to simply sit and tell a story if your laptop blows up that morning. 5
6. DONโT Miss the Boat โฆthe market space was already over funded. A situation where, by the time we finally started pitchingโฆ Launch early, launch often. Use agile development & get your product out the door. Use social media & build customer metrics. 6
7. DONโT Play Games with VCโs: You Lose A situation where an entrepreneur thought he could play one VC against anotherโฆ โฆin search of an optimal term sheet, but in the end, no deal. The โbestโ deal may not be the one with the highest valuation. Remember there are many other terms in a term sheetโฆ 7
8. And So Much Moreโฆ 8 Turn off your cell phone before a meeting Manage the level of detail in your preso: 50 slides doesnโt work Be prepared for the obvious question: Competition Avoid presenting to investors who donโt understand your space
9. Takeaway? Learn from othersโ mistakes & you wonโt get the door slammed on you! Thanks! Diana Benedikt di@veninsight.com @dianabenedikt 9
Editor's Notes
Iโve run a startup, Iโve been on the venture side. I speak investor.
Over the years Iโve helped more than 125 startups in their pursuit of telling their stories to investors and cutting the big deal. Iโve seen a ton of companies, debated with many founders, presented hundreds of times to investors, and in the end, Iโve learned a lot. Iโve really learned a lot from the failures along this long road and since Iโve seen so many of them, I can share them here for everyone to benefit. Here are a few you can learn from:
ย The mistake was not properly assessing the expectations of the investors involved.Angels and VCs are different animals, and different investors have different demands with regards to due diligence. The message here is do you homework. Investors want a thorough financial model thatโs based in reality. If you canโt build it, hire someone to build it, but make sure you understand it and can explain it. ย
A situation where the demo failed during the pitch meeting โ resulting in an absolute failure. The lesson here was NEVER go to a meeting where your pitch totally relies on a demo. Use screen shots or printouts or anything else you have โ but always have some way to show what your product does, and how it is game-changing.ย ย Never assume your demo will work flawlessly; always have a backup. ย
The lesson learned was that if you aim for absolute perfection, you risk missing the boat altogether. Iโve seen entrepreneurs do this all the time โ BIG MISTAKE. You can improve your deck and story along the way, but get out there while youโre still relevant, and while the market has an appetite for your solution. ย
The mistake was that VCโs all talk to each other โ donโt ruin your deal by misleading one and playing him off on the other. Youโre getting In bed with these guys, be honest and open. And make sure you can live with them going forward. ย
There are a lot of points for failure in the startup/investor interaction process. Iโve only spoken about a few. Here are a few more:
