Why is the pitch so important, when there are so many other hoops to jump through? Here are some tips from a VC pundit on the other side of the fence.
I’ve just been reviewing an interview I did with Bob Christiansen who runs Southern Cross Venture Partners, a venture capital firm with about $300 million to invest in technology businesses (particularly startup capital).
Bob has been around for a couple of decades and has a bucket load of experience. He was based in the US for many years and is one of the best when it comes to technology based investments.
I asked him why the pitch is so important. After all, the pitch is only the start of the venture capital process, and there are a lot of other hoops to jump through. Why is this step so critical?
Here’s what Bob had to say…
“In all that you need to do to get the money, the pitch is the only step where ‘the laser is right on you’. During your pitch, those very savvy investors will carefully observe everything that you say AND do.
“This is the very first step and it is also the Go/No-go step. So you don’t have the chance to warm up to these investors, you don’t have the opportunity for a second chance if you really slip up.
“And do you think that this might make you a little nervous?
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“So, there’s a lot happening in this hour. Both the venture capital investor and the entrepreneur have a lot at stake. Investors are looking for that elusive successful investment, the one that will beat all the odds and bring in the bacon. Entrepreneurs want to get that cheque signed so they can go out there and kick some really big goals.
“Venture capitalists will be looking for the ‘holes’, for what can go wrong. That’s where they’ll probe during your presentation. They’ll be watching your reactions to questions, how you work with your team members, how you behave when under pressure.
“They will be assessing their level of risk during your pitch. That’s their job. Your job is to convince them that you are the star investment for them.
“There will be tough questions. That’s a good sign. The more probing and detailed the questions the more interested they are in your business. It would be a mistake to interpret tough questions as negative.
“During your business presentation the venture capitalists will have this laser focus on what you say and do. They need to make decisions about you and your company very quickly. The investors will need to decide if they want to elevate the discussions. And they don’t like to waste time.
“Pitching is intensive. Good investors know what you are going through. The laser focus is not to make it tough for you, but to help investors make decisions quickly. Be prepared. Hone your presentation skills. Get lots of presentation tips and you’ll be fine.”
Till next time.
Gail Geronimos, is the founder of Achaeus, which helps entrepreneurs develop their businesses and she has just started a new site www.pitchingtoinvestors.com with tools and tips about how to develop killer presentations to raise capital.
To read more Gail Geronimos blogs, click here.