Back on February 7, 2012 I had just come from a pitch event where I was listening to entrepreneurs speed pitch their companies and I tried to provide advice to make life easier for an entrepreneur in the event she/he wants to attend an event like this.
The advice essentially boiled down to be concise and be conversant in both your company and your industry. One of the entrepreneurs who attended that Funding Post event read my post and offered to provide his opinion of the process. I suggested the following parameters for discussion…
- Talk about what you were hoping to accomplish.
- Talk about what you think you did accomplish?
- Compare this, if possible, to other events you tried before.
- Assess if this event was a good use of your time?
- Discuss whether the Angels and VCs gave you actionable feedback?
- Did you learn anything for next time?
The following guest post addressing the ‘Speed Dating’ topic from the perspective of the entrepreneur is from Ken Kiarash, Co-Founder MiiWee:
I am the co-founder of a start-up in NYC and wanted to share my experience of recently attending the NYC Venture Capital and Angel Showcase, sponsored by the FundingPost. I attended with a friend who was also looking to meet some VCs and Angel investors, to make connections with not only potential investors, but also other entrepreneurs as well. I have attended many such events in NYC and Silicon Valley, some smaller in size and more ‘intimate’ while others have been larger ‘social‘ events.
The event was generally well organized and easy to navigate, but there are a few things that both organizers and participants can do to meaningfully improve it. Let’s start with the registration and post-registration issues: The event’s site is very confusing and poorly organized/written. There were two types of tickets: 6-9PM cocktail reception for $135 or for $425, you would get a ticket to the reception plus an optional pitching workshop. Not only the information on Fundingpost’s site was confusing to decipher, but also my subsequent to communicate with them was just as confusing. I attended the evening reception, but found out that the afternoon ‘workshop’ session was well worth the additional cost due to ability to get a lot more face time with the VCs.
Regardless of which session you attended, from an entrepreneur’s perspective, there needs to be more clarity and transparency of what a particular VC fund and or Angel investor is interested in and what they won’t invest in. I spoke to a VC fund, that although I thought we would have a good connection through our alumni network, it ended up being a super-brief pitch, followed by ‘we don’t invest in consumer-oriented companies’, something that could have easily been avoided had they mentioned that in their bio or even on their site (I am not going to go into a tangential discussion of reviewing VC sites, but let’s just say most can do a lot better than the generic pages they have created from boilerplate templates!).
The fact that there were two reps from each fund made the line of eager entrepreneurs move a lot quicker, but there were a few tables with reps that were simply not ready for the crowd, including some who were too young and too inexperienced to handle the deluge of various ideas being thrown at them in the rapid-fire format. One firm had even decided to send two extremely junior reps who jointly listened to each and every individual, letting them pitch for 10 minutes or more, making it almost worthless to wait in line for your turn.
As frustrating as the fund-raising process may be, those seeking capital need to do a better job themselves. First and foremost, be prepared! You must do your homework before you get to these meetings. There were 37 funds represented at this event and we spent nearly two days researching each and every one of them. You should get to know who these VCs or Angel investors are, types of companies they invest in and see whether it is even worth your time to stand in line and pitch your idea. Some invest in very early stage ventures, some only do so after you have an established product and even generate some revenue, and others may only invest if you are in a particular city/state, etc. If you’re looking for small seed money, you may be better off spending your time and resources elsewhere.
Next, you must have a pitch deck ready for these events. If you don’t have one, Google is your friend: search, find, read many, and finally write one. The deck is not only something to give to the VCs/Angels but, just as importantly, should be used as a tool for you to crystalize your idea and be able to pitch it more efficiently. You only get a limited amount of time and if your deck is done properly (short and concise), you will be able to pitch your idea to any investor in under 2 minutes.
Finally, prepare to answer key questions, and if you have spent enough time preparing a good deck, you should have most of the generic topics that come up in a short ‘elevator’ pitch covered: What is your product? What is the problem you are trying to solve? Your solution, market size, competition, who is in your team, how do you make money, what do you need the money for, and lastly, how much do you need (hopefully you can answer this with a pre/post valuation as well, as it is a sensitive subject for many Angels)
If you need to, have a drink to calm your nerves, but keep it moderate and leave the hangover-inducing version to later at night when you need to deal with all the rejections. And generally, don’t forget to have a good time. Talk to as many people as you can. Introduce yourself to strangers and exchange cards, even if you don’t get to talk to them about your idea in detail. These events are probably as important for their networking opportunities as they are for meeting potential investors. Lastly, be prepared for lots of rejections, as they are extremely normal in the industry. If you TRULY believe in your idea, such dismissals should give you a sense of where you need to tweak your plan, whether it lacks management depth, execution issues, or the idea itself needs to be refined. Having said that, even you should recognize if an idea is a really bad one and cut your losses short.
Wishing you all a successful fundraising year… Ken Kiarash Co-Founder MiiWee
Thank you, Ken, for your perspective. I think this is a sound perspective and good advice.