5 Lessons Learned From Pitching VCs

Going out to get funding isn’t easy. You have to be a salesperson, dreamer, visionary, technologist, operations manager and relationship guru. And that’s just the beginning.

By the time you’re done pitching VCs for money you’ll be a PowerPoint wizard and an Excel master. And that doesn’t guarantee anyone will write you a check. But at least you’ll be able to outsource your PowerPoint and Excel wizardy to others…

You will get better the more you pitch, because there are plenty of skills and tricks you can learn along the way. A great resource is the recently launched Venture Hacks, which opens the door on tons of information entrepreneurs should know about the world of venture capital.

I’ve learned an absolute ton over the last few weeks going through the funding process. Here are 5 of those lessons learned from pitching VCs:

1. Each VC has their own style. You should know what each VC is like before pitching them. Try and get as much inside information as you can. Do they blog? Do they focus more on numbers or higher level vision? What are they really looking for in an entrepreneur? What sort of pitch style do they like? If you can’t get this background information beforehand be prepared to pick up on early signals during your pitch and adjust accordingly.

   Over time, you’ll give the same basic pitch to multiple VCs, but it’s going to change significantly for each one.

2. Use PowerPoint effectively. PowerPoint won’t sell you or your startup. I doubt any VC has ever watched PowerPoint slides alone and said, “Should I wire you the money or just give it to you in cash right now?” PowerPoint is a tool to help you. The key is to use it as effectively as possible. For starters, make sure you create a very visual presentation.

   When Fred and I started developing our first PowerPoint presentation it had lots of text and bullet points; plenty of interesting detail but no visual impact. An image is worth a thousand words, and by using images and being forced to find images that truly represent the concepts you’re pitching, it gets you thinking more seriously about the exact message of your pitch and how you’re going to get it across.

   VCs like a little pizzazz as much as the next guy. And a certain amount of “wow” factor makes a presentation look more professional and serious. Just don’t go overboard.

3. Don’t take offense. Easier said than done, but don’t take things personally. Don’t get frustrated or angered by questions they ask. Don’t worry about VCs who don’t get, like or believe in your idea. There are plenty of VCs and each one is going to respond differently. And VCs aren’t a special breed of person that’s unique from the rest of us. Some of them are great guys, some are not so great. Some are friendly, some aren’t.

   The more you know about them beforehand (see point #1) the better you’ll be at this stage. If you’ve heard that a particular VC is always gruff the first time, so be it.

   And even if you’re walking in blind, just don’t worry about it. Not everyone has to love you. And not everyone has to understand you either. The less personal you take it, the easier and more relaxed you’ll be, and the more success you’ll have pitching.

4. Pitch with conviction but state your assumptions. Making big, bold statements is fine. You need to show that you believe in your idea, and it’s OK to make blanket statements that you consider fact. Just back those statements up by making your assumptions clear. You don’t have to go through every assumption, but the simple fact that you say, “There are some significant assumptions behind this…” helps. More than anything, VCs want to see where your head is at, and how you’re approaching certain issues, milestones, etc.
5. Sell passion, concrete ideas, and then go for the money. My good friend Austin Hill calls this the “Hearts, Minds, Wallets” approach. You should be passionate about your startup (if not, there are other problems) so selling passion is easy. And you want some of that passion fto rub off on the VCs. But you can’t sell passion alone. And you can’t sell a concept by itself. You need to get to people’s minds by giving them concrete ideas: what you’re selling, how, your model for making money, etc. And once a VC can tie your passion and real ideas together in a cohesive way (in their own heads) you’re in a better position to get the funding.

Pitching VCs is hard. It takes a lot of preparation and a combination of skills and experience that few of us have right off the bat. You need great presentation skills, lots of chutzpah, plenty of emotion, and a good, sellable plan with concrete components. A little luck doesn’t hurt either…

This post is submitted to Darren Rowse’s Top 5 Group Writing Project, along with hundreds of other “top 5″ posts. He’s had an amazing response.