If you plan on growing your business beyond a few employees, you may consider seeking outside funding from a venture capital firm. Knowing what venture capitalists are looking for in a quality pitch can help improve your chances of getting funded. The following article from Small Biz Bee provides some tips for preparing an effective pitch for your company.
At some point you may be thinking about raising additional funds for your business to grow and expand. If that’s the case, you’ve probably thought about venture capital as one source of those funds.
Not only is venture capital tough to get, but pitching to a VC can be intimidating – but it doesn’t have to be. Here are five great tips from an actual VC who explains what it takes to make a good pitch and give yourself the best chance to get the money.
Tip #1 – Every Step is to get to the Next Step
Every time you communicate with a VC your goal should be to get to the next step. No overkill – sure you want to share mountains of data with them right off the bat, but instead you should be looking just to get a meeting. Instead of overwhelming them, think in steps – and at first it goes introduction, then meeting, then pitch, then money.
Tip #2 – When you Get the Meeting Be Succinct
You may get an hour meeting, but it won’t be for an hour. Huh? True, they may give you an hour, but when you factor in somebody being late, cell phones ringing, or other technical issues, your 60 minutes will more likely be 15-30. Create your pitch with that timeframe in mind. If you get done in 15 minutes, great then you have 45 minutes to answer questions. Much better than banking on 60 minutes and winding up with 10.
Tip #3 – Get to the Value Proposition in 5 Minutes
VC’s want to hear what you can do, what value your idea/business brings, and do you have credibility. The quicker you can demonstrate this the more likely they are to keep listening. VCs by nature have short attention spans, if you’re not telling them something interesting they’ll quit listening.
Tip #4 – Keep the Overall Pitch Short
You should be able to clearly articulate your message in 20 minutes. If you can’t get it down to 20 minutes rethink your pitch or rethink who you are pitching to. These VCs should be pre-qualified to your industry so don’t waste valuable time trying to “bring them up to speed” on fundamentally what you do. They should already have a general idea of what your business does, if they don’t they are the wrong VCs for you.
Tip #5 – Control the Meeting
May sound hard to do, but you need to keep control of the meeting. You come in and tell them “I have 20 minutes and 10 slides, bear with me and we can talk at the end”. You have the podium and the audience, don’t let that control slip away. Your goal is to get through the meeting, without getting off track, so that you can get them all of the information they need about you and your business in order to make a decision.
This article has been republished from Small Biz Bee. You can also view this article at Small Biz Bee, a site sharing small business ideas from business owners and entrepreneurs.