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Pitching a VC? Here’s what to do and what not to do

Advice on how to approach your startup's next meeting with a potential investor

Lessons learned from investor by Alexander Selegenev
December 9, 2015
Short URL: http://vator.tv/n/41db

If you’re an entrepreneur ready to sit down with a VC to discuss your world-changing startup, you reading this benefits us both. Entrepreneurs new to the scene want to know how to make a great impression, and we want you to make the most of our time together. We want you to know what we’re looking for, so that you can show us the best of what you’ve got. It might feel like a high stakes meeting, sitting down with investors who may or may not supply your startup with critical resources. But it’s really as simple as offering a direct and thoughtful presentation that explains why you – and the product or service you’re excited about setting on the world – are indeed a strong candidate for investment.

Here are our Do’s and Don’ts for entrepreneurs meeting with VCs:

Do research the VC you’re meeting ahead of time, and prepare for tough questions.

An entrepreneur should certainly look over the VC’s current portfolio to get a sense of the market segments they focus on. Look for published (written or videoed) interviews with the VC where they explain their decision making process. VCs all have a unique style, but we’ll all ask tough questions when we need the answers. Before meeting, think of the most difficult questions you can ask yourself about your startup, and work on delivering the most honest and persuasive answers.

Don’t try to shape your answers and viewpoints to fit what you think VCs want to hear.

Whatever ideas are currently en vogue with investors are of little importance next to the fundamentals of what your startup is doing. Don’t hesitate to speak and defend views and approaches you truly believe in. Smart VCs want to understand new ideas and listen to your experiences. If you explain where you’re coming from with passion and if you support your views with facts, you just might win new believers to your cause – and find yourself with new resources to pursue your hypothesis.

Do make it simple for us to get the information we require.

The most important and direct questions that VCs need answered are the basic ones. How, precisely, do you plan to scale your current business? What are your main growth drivers? How exactly would you use new resources – the money, people, and connections that VCs can help you access – in order to grow faster? Give straightforward (and accurate) answers to any simple factual inquiries. For example, if the VC asks to know your startup’s revenue so far, but you’ve only been actively selling for a short period, go ahead and say so. Give the numbers directly. In our experience, some entrepreneurs in VC meetings – particularly those with ecommerce startups – will make the mistake of diving into projected revenue instead, or will be unclear in distinguishing sales numbers from actual revenue. With VCs, who require insight into those basic numbers, be clear.

Don’t be boring.

Show some excitement. Prove you can sell. We love to know that an entrepreneur can inspire and make others believe in a business – it shows that you’ll be able to do so with your team, your distribution channels, the press, and your customers as well. Win us over with the persuasive story of exactly how your business will grow. A typical mistake entrepreneurs make is to talk only about their product, and not at all about business growth. Of course to any entrepreneur, their product is their baby. But to VCs your baby pictures are boring; it’s the potential growth that’s interesting. Show us that you know how to scale. Make it compelling.

Do make our job easy.

Maybe it’s easier said than done, but all you have to do is follow the advice above to have a great VC meeting. For example, take our meeting with the CEO of ScentBird. She amazed us from the start with a perfect understanding of her company’s growth, a crystal clear plan for scaling, and brilliant knowledge of every stat and detail important to her business. It was so good it made our job easy – we made a decision to invest within minutes. When you come to a VC meeting having done your homework and having prepared a winning, detail-driven story of why you’re right for investment, you give the VC the assurances and excitement that we always go into these meetings hoping to find.

Alexander Selegenev is Executive Director at TMT Investments, a venture capital firm focused on high-growth, internet-based companies across a variety of B2B and B2C sectors. TMT Investments is traded on the AIM market of the London Stock Exchange.

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