Boccafoli Lawncare and Landscaping

By Ken Krysinski

As a budding startup business owner, the opportunity to sit in on a venture capitol presentation was a gold mine of information. As a fly on the wall, I was able to objectively observe the exchange between startup business owner and venture capital investor. The following are my top 5 tips on what to do when giving your pitch to investors.

1. Be Prepared- Don’t assume that knowing your product and Powerpoint slide presentation inside and out will be enough to secure you the funding you are seeking. As the presenter, you are representing the company as the CEO, head of Accounting, Marketing and Sales, as well as Human Resources, and Product Manager/Developer. Be prepared to answer very detailed questions in any and all fields of business. VC providers are very skilled at finding your weaknesses, so do your best to minimize them.

2. Control the Meeting- Let your audience know from the start how your presentation is going to be performed. Specify in detail what you will present, and at what points you will stop for Question and Answer periods. You should not expect to run through your entire presentation from Introduction to “So when do we get the money?” without a lot of questions. Breaking after each main topic for a brief Q and A session will assure you that nobody will be left behind when you go from explaining your product to you financial expectations. It will also allow you to completely explain your product or service without being interrupted. These interruptions can quickly get you off track and you may leave realizing that you never discussed some of the key features you hold. Establishing this control and maintaining it throughout is a strong statement of your leadership ability and the cornerstone on which Venture Capitalist determine their investment in you.

3. Know Your Audience- Never assume your audience is either too dumb to understand your product or service, or too smart to be given a thorough explanation. If it is possible, find out what other investments these people are involved in. Figure out what they know about your industry. If that is not possible, start your presentation slowly by asking them questions about their knowledge of your field. You will be able to gauge how detailed you need to be in the product presentation.

4. Key Financials- Whether you are in a meeting asking for $100,000 or $10,000,000 in investment capital, it is of maximum importance that you know your key financials. Much of your presentation will be discussing the “Market Potential” and “Expected Revenue from Sales”. While these are important numbers in getting a VC’s attention, these numbers are understood to be bold predictions at best. What you really need to be well prepared for are the use of funds numbers. If you are pitching for capital, it will not be enough to say you are looking for $1,000,000. You will have to back up in detail, how that money will be spent and what the effect off it will be on your bottom line. Know and be able to support your breakeven point. (Including sales progression, and monthly burn of capital) Have a detailed spreadsheet of expenses from specific employment positions and salaries, to a breakdown of expected advertising expense by media type. The more familiar you are with these financials, the more seriously a venture capitalist will take your opportunity. If they know you have done your homework on how the business will succeed, they can focus on their belief in your product or service.

5. Attitude IS Everything- Venture Capitalists can be very aggressive and intimidating. It is their job to test your knowledge and strength, as the leader of your business. No one is going to invest their money in a leader they wouldn’t be willing to follow. Do not be affected by their tactics. You should maintain your confidence in yourself and your business. Instead of getting offended, try taking their point of view both while preparing for the meeting and at the meeting. Figure out what you would want to see in a leader if you were thinking about investing in someone and act accordingly. In the end just remember that you are the one with the opportunity. You have given your audience the chance to be a part of your success. There are many Venture Capitalists out there and only one you. If you have a truly interesting and unique product or service, you are in the drivers seat.

Ken Kryinski is the Co-Founder of startup QuoteCity.com, a contractor referral service, and writer for OpenSourceFanatic.com, a provider of information on business and utilization of public software.

Related Products

Deal Terms - The Finer Points of Venture Capital Deal Structures, Valuations, Term Sheets, Stock Options and Getting Deals Done (Inside the Minds)	QuickBooks Pro 2006 Financial Software for Small Business	The Knowing-Doing Gap: How Smart Companies Turn Knowledge into Action