There are hundreds of posts on how to pitch VCs:  what to say, what to wear, what to demo, etc.   So I have never bothered to focus on this topic.  But I was recently at a pitch where an experienced CEO pitched a VC, and it went poorly in my view.  I was an observer at the meeting.  So, I thought I would share a few thoughts on pitching:

1.   Make it incredibly clear what your company does:  it needs to be so clear that a non-techie can understand.  Anyone with ZERO knowledge of the product space should be able to understand what your product does.  It might take 5 minutes of explaining, but get this done up front.  Avoid buzz words and acronyms.  And if you are using terms that have more than one meaning make it very clear how you are using it.  For example, when I hear the word “App”, I think of an app in an app store.  If that is not the meaning you intend, make it clear what you do.

2.  Don’t assume that because your product is incredibly cool and functional that the VC listening will automatically understand why anyone would give a hoot about the product:  at the meeting in question, the VC actually asked the question “why does anyone care about this?”.  Usually the founders hit this point out of the gate.   This also relates to what the product does.  You have all heard the expression “what pain does your product help?”.   Well, make sure to cover that so that no one has to ask that question.

3.  Don’t dominate the conversation:   a quiet room is a sign the meeting is not going well.  If you encounter a quiet room as the pitch is proceeding you might consider saying something like “I think I have lost you – how can I make this more engaging.”

4.  Never talk for more than one minute without giving the VC listener a chance to ask a question:  And, if the VC is not asking questions, pause and say “do you have any questions at this point”.  Silence means that the VC does not care or that the VC is not understanding.  This “one minute” rule might not apply at the very beginning of the meeting where you are explaining your product and the pain point.

5.  If you bring a team member to the meeting, make sure the team member talks:  this relates to dominating the conversation as well.  A wallflower does not send a good impression.  The CEO should be the primary talker, but the team members should be weighing in.  In the meeting in question, I tried to weigh in a bit too.  An engaged room is the goal.

Leave your input in the comments.  Thanks.

I like the practice of VCs giving term sheets that provide for a specific size for the total round and then stating how much the specific VC will contribute.  For example, “VC will serve as the lead investor up to $400,000; Company would source balance of the round up to $600,000 (so round size would be up to $1,000,000 in the aggregate).”

At the early stage, the founding team often has lots of “interest” lined up waiting for a lead.  I hear this often.  Well, the structure described above solves that problem.  And it also puts the founding team to the task – VC stepped up to lead so now go and fill out the round!

From my perspective this serves as a test for the founding team; and it is an important test.  It serves to validate their claim about having enough interest to fill out the round and also proves their ability to get that done.  Even after the lead investor steps up and provides a term sheet, getting remaining hard commitments is incredibly challenging and can take weeks or even months!

Another interesting point about making it clear that the founders (or subsequent management team) need to fill out the round is that it sets a tone for going forward fund raising responsibility.  I love to help our portfolio companies raise investment capital, but the buck stops with the management team – it is the team’s responsibility to raise capital.  Sometimes it seems that this responsibility never stops.  I like reinforcing from the earliest interaction that the management team (might be the founding team) of a VC backed company can never delegate the fund raising responsibility.  We (the VCs) can help, but the effort will fail if not led by the team.

Go raise some bucks!