This presentation is made possible by the support of the American People through the United States Agency
for Internationa...
Best method to get a
meeting?
An introduction from a
respected source
Getting your meeting
Typically around 10,000 of earl...
Tech Investor Ecosystem
Angels &
Incubators
($0-10M)
“Micro-VC” Funds
($10-100M)
Smaller VC Funds
($100-500M)
Larger VC Fu...
•  VCs rarely take cold calls
•  Best sources:
•  Other VCs
•  Attorneys, Advisors
•  Other entrepreneurs in their
portfol...
Each VC has their own investor framework
•  Framework allows partners and
associates a way to evaluate
specific opportunit...
Aligning your Fundraising Efforts
Target List Introductions
Meeting
Mechanics
Set your Targets
•  How much are you looking to raise?
–  Under $25K Individuals
–  $25K - $50K Angels, Incubators
–  $100...
Know Your Audience
•  Who you are meeting with?
•  Associate?
•  Partner?
•  What is the investor’s and the firm’s focus?
...
Show up ready
•  Arrive 10 minutes early
•  There will be technology problems
–  Often a crappy projector (800 x 600)
–  B...
Pitching
•  It’s not just words on slides
–  People listen to 7% of words that you
say
–  They listen to 52% of your body
...
VCs  listen  in  their  own  way  
•  Pitch to everyone
•  You never know who is going to be your advocate…
Industry
“Expe...
You’re “Meeting” each other
•  Be formal but relaxed
•  Tell stories
•  Be entertaining (but not too much)
•  Drop names e...
Remember
•  VCs have money to invest
–  They want to put it to work
•  They’re meeting you to listen and learn
•  The purp...
Fundraising process
Term Sheet
•  Priced round vs. note.
•  Terms, etc.
Negotiations and
closure
Initial Meeting
•  Furthe...
Things not to say
Our projections are conservative
•  They want you to be aggressive
Gartner says that our market will be ...
More things not to say
Several investors are already doing due-diligence
•  So, why are you talking to me. I don’t believe...
Remember
•  VCs have money to invest
–  They want to put it to work
•  They’re meeting you to listen and learn
•  The purp...
VCs to Avoid
•  The banker / attorney
–  Someone with zero operating experience
–  Ivy league degree
–  Can’t add much val...
Avoid
•  Yacht club member:
–  Wears fancy loafers with no socks and
has a sweater wrapped around his
neck.
–  This person...
Run away
•  The celebrity
–  Politicians, movie stars, etc.
–  Ashton Kutcher is cute but…
–  Creates too much hype withou...
Avoid Avoid Avoid
•  The technical legal guy:
–  Layers on legalese every time the financing
is discussed
–  He won’t chan...
Avoid Brokers
•  Promises to raise a financing for
you for a % of the dollars raised
–  Often a monthly fee whether he’s
s...
Choosing a VC
•  As the CEO - you are the firm
•  Your funding sources become your day-to-day partners
–  Chose your partn...
Money In à
$
Money Outà
$$$$$
What’s in it for me?
Risk Factors
Click here for a Classic Dialog…
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8.4 your vc meeting.pptx

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Getting a meeting with Venture Capitalists and how to run that meeting properly

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8.4 your vc meeting.pptx

  1. 1. This presentation is made possible by the support of the American People through the United States Agency for International Development (USAID). The contents of this presentation are the sole responsibility of Rick Rasmussen and do not necessarily reflect the views of USAID or the United States Government. Your VC Meeting
  2. 2. Best method to get a meeting? An introduction from a respected source Getting your meeting Typically around 10,000 of early stage decks in circulation at any point in time
  3. 3. Tech Investor Ecosystem Angels & Incubators ($0-10M) “Micro-VC” Funds ($10-100M) Smaller VC Funds ($100-500M) Larger VC Funds (>$500M) Incubation Seed Series A Series B Series C+
  4. 4. •  VCs rarely take cold calls •  Best sources: •  Other VCs •  Attorneys, Advisors •  Other entrepreneurs in their portfolio •  Pitching contests: good for practice but not for leads Get Introduced
  5. 5. Each VC has their own investor framework •  Framework allows partners and associates a way to evaluate specific opportunities •  In this case it’s the 4 “P” model –  People –  Product –  Potential –  Predictability •  Know what they’re looking for and adjust your pitch as appropriate
  6. 6. Aligning your Fundraising Efforts Target List Introductions Meeting Mechanics
  7. 7. Set your Targets •  How much are you looking to raise? –  Under $25K Individuals –  $25K - $50K Angels, Incubators –  $100K - $250K Angel Groups, Microcap VCs –  $500K - $1M Small Cap VCs –  $2M+ Medium to Large Cap VCs •  What value can your funding partner bring to you? –  Partnerships –  Customers –  Strategy –  Smart money vs. dumb money
  8. 8. Know Your Audience •  Who you are meeting with? •  Associate? •  Partner? •  What is the investor’s and the firm’s focus? •  Are there related investments? •  Who do you know in common? •  Did they make money for this or another firm? Customize your deck and the discussion around circumstances
  9. 9. Show up ready •  Arrive 10 minutes early •  There will be technology problems –  Often a crappy projector (800 x 600) –  Bring a PC, Mac and a USB stick –  Bring hard copies of the pitch •  Business casual is fine. No need to wear a suit unless that’s your thing.
  10. 10. Pitching •  It’s not just words on slides –  People listen to 7% of words that you say –  They listen to 52% of your body language •  Connect with your audience –  Make it relevant to them –  Be clear (first in your own head) –  Pause & let the message sink in! •  Practice (in front of your friends, your mother, anyone…!)
  11. 11. VCs  listen  in  their  own  way   •  Pitch to everyone •  You never know who is going to be your advocate… Industry “Expert” who wants to show off in front of peers Analytic-type Waiting for the numbers Hyper ADD Type A super-triple connector Why are you bothering me I’m so busy and important. Just ask anyone that matters. Really. It’s super important that you realize my stance on this planet that you know are just a speck in my universe and I wish I could have more time but I have other matters to attend to… Naturally curious who want to know more
  12. 12. You’re “Meeting” each other •  Be formal but relaxed •  Tell stories •  Be entertaining (but not too much) •  Drop names early and often –  See if there is a connection •  Have fun (but not too much)
  13. 13. Remember •  VCs have money to invest –  They want to put it to work •  They’re meeting you to listen and learn •  The purpose of the pitch is not to close the deal. It’s to: –  Stimulate interest –  Take it to the next step –  Get your next meeting
  14. 14. Fundraising process Term Sheet •  Priced round vs. note. •  Terms, etc. Negotiations and closure Initial Meeting •  Further partner meetings Socializing the idea •  Syndication?
  15. 15. Things not to say Our projections are conservative •  They want you to be aggressive Gartner says that our market will be $50B in 5 years •  Do your own market research Boeing is signing our contract next week •  Come back with a contract Key employees will sign us as soon as we get funded •  Why aren’t they dedicated now?
  16. 16. More things not to say Several investors are already doing due-diligence •  So, why are you talking to me. I don’t believe you. •  Our competition is too big, dumb, and slow to react to us •  Never underestimate competition •  Patents make our business defensible •  Patents don’t matter for a startup. •  If the giant wants to crush you, they will •  All we have to do is get 2% of market share •  We invest in leaders that are looking to be #1 in the market. •  Striving to get 2% share shows that you don’t understand…
  17. 17. Remember •  VCs have money to invest –  They want to put it to work •  They’re meeting you to listen and learn •  The purpose of the pitch is not to close the deal. It’s to: –  Stimulate interest –  Take it to the next step –  Get your next meeting
  18. 18. VCs to Avoid •  The banker / attorney –  Someone with zero operating experience –  Ivy league degree –  Can’t add much value •  The dude on 20 boards –  Too busy for you –  How much bandwidth is available? –  Check references to see how much value the other 19 companies are getting.
  19. 19. Avoid •  Yacht club member: –  Wears fancy loafers with no socks and has a sweater wrapped around his neck. –  This person will not get the plight of a penniless, desperate founder •  The generalist: –  A VC who does software, clean tech, biotech and every other kind of tech –  Only work with VCs who have expertise in your space.
  20. 20. Run away •  The celebrity –  Politicians, movie stars, etc. –  Ashton Kutcher is cute but… –  Creates too much hype without value added •  The corporate drone –  A former executive pushed out of the mainstream due to incompetence –  Now working in their venture arm
  21. 21. Avoid Avoid Avoid •  The technical legal guy: –  Layers on legalese every time the financing is discussed –  He won’t change. You’ll never be able to work together as a team. •  The shark: –  A predator who attempts to purchase majority control of your company in the first round –  A bargain hunter without your best interests in mind –  No incentive left for you or the team
  22. 22. Avoid Brokers •  Promises to raise a financing for you for a % of the dollars raised –  Often a monthly fee whether he’s successful or not •  It’s your job as CEO to raise money. If you can’t do it yourself, you don’t belong. •  In the US, this is illegal unless he has a broker-dealer license (SEC /FINRA Series 7 exam)
  23. 23. Choosing a VC •  As the CEO - you are the firm •  Your funding sources become your day-to-day partners –  Chose your partners wisely –  They will end up dictating your priorities and direction –  They can help you succeed or take you down
  24. 24. Money In à $ Money Outà $$$$$ What’s in it for me? Risk Factors
  25. 25. Click here for a Classic Dialog…

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