16 Rookie Errors Founders Make Pitching To VCs
And in true Buzzfeed style … I’m not so sure about #3. 🙂
#3 advises founders to not take a consultant along to the pitch. I can see the logic from the VCs point of view – unnecessary interference. But at the same time, a founder not having independent advice from a 3rd party does make him an easier target for negotiations and works to the VC’s advantage.
That said, it’s still a great article and emminently worth reading. It’s by Jason M Lemkin, founder of SaaStr, a $60 million fund in Palo Alto. It attracted over 2,000 LinkedIn likes in a couple of days. While that number may not seem particularly exciting given the millions of likes the average cat video gets in YouTube … likes in LinkedIn aren’t particularly easy to come by and 2,000 in two days is pretty impressive.
Some of the tips will be familiar to any founder who’s done a bit of research before turning up for their first pitch, but there’s bound to be something new here for everyone:
Being cagey with answers. Just answer the question. How much are you raising? Where are you in the process? Being direct (and honest) builds trust. With VCs, you want to build trust quickly, if you can.
Not sending the deck ahead of time. Just send it. You are wasting both a lot of time, and an opportunity, by not letting VCs do basically homework ahead of time. Make it easy on them. And send it as a PDF.
Not doing at least basic homework on the VC firm. You should know their other investments in the space.
Spending more than 2 slides on “the industry”. Do not do this, unless asked. Assume VCs understand what is “happening in the cloud”.
Asking for coffee to “share notes”. Some VCs may want to do this, but I sure don’t.