Pitching to a panel of sceptical VCs is just like a first date. The point is to get a second date and maybe a long-term relationship out of it and many of the same rules apply.
At least that’s according to Katy Turner and Andy Chung from Eden Ventures who told GeeknRolla delegates just where some inexperienced pitchers are getting it wrong.
Preparation: “It’s like a first date – you need to find out what they (VCs) like and don’t like,” says Chung – stressing the need to find this in advance of the pitch meeting. “Preparation is so important: what do they invest in, what’s in their portfolio, what are they looking for in their investments?”
There might be lots of things on the VC company’s website, but Chung recommends “speaking to someone in their network, someone who may have pitched to them before” to find out what really makes them tick.
Looking for love: Continuing the dating theme, Turner says VCs are “definitely not interested in the one night stand or the early exit: we’re looking for a relationship that will last between three to five years, if not longer.” She says the whole “point of a pitch is to get a second date so leave us wanting more.”
Size matters: “Contrary to what most women will tell you, size really is important,” says Turner. “We’re looking for market opportunities of around £1 billion… If you’re setting up a social network for Norwegian goatherds in the Outer Hebrides it’s probably not for us.”
It helps to address the global opportunity that’s out there in a particular market and think about how much of that you can grab, she says. But Turner warns that 80 percent of the M&A market happens below the $200 million mark and Eden is looking to make deals of a higher value than that – so she prescribes some realism in what a company is worth.
Don’t pitch technology: Don’t bore the VCs, both Turner and Chung warn. That means not talking through your entire CV and – more importantly – don’t drone on about technology, however interesting you think it is. Chung says: “We’re not against technology, but it shouldn’t be the focus of your pitch.
“What you really need to focus on is, 1. who’s your customer and how isn’t? 2. What problem are you solving? We don’t want to hear that the target market is the ‘the whole internet’ 3. Can you pitch this to your friends and familiy? and 4. Passion – if you’re not passionate about it, how can you expect us to be?
No competition?: While it might be tempting to say a start-up is so unique it has no peers, Turner cautions against it: “Don’t tell us there’s no competition. If there’s no competition, then we ask ourselves ‘what’s the size of this market?’ We’re really looking for differentiation.”
We’ll call you… The pair were agreed that if you’ve gone past the pitch stage and nothing comes of it, VCs do want you to stay in touch. “Just because we can’t get together now doesn’t mean we can’t get together in future,” according to Turner.