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10 Tips on How to Pitch a VC (FOWA, London)

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Dave McClure
Dave McClure

The document provides 10 tips for pitching a venture capital firm, including keeping the elevator pitch short at 30 seconds, focusing on the problem rather than the solution, demonstrating the solution, showing the size of the target market, outlining the business model and revenue sources, discussing any proprietary technology, comparing competitors, explaining the marketing plan, introducing the founding team, and detailing funding needs and milestones. Additional resources for startup metrics, sample pitches, and blogs are also referenced.

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10 Tips on How to Pitch a VC Dave McClure 500 Startups FOWA London, October 2011 [email_address] / @DaveMcClure
Essential Elements of your Pitch Elevator Ride (30-sec quick pitch) The Money Shot (demo) Size Matters (market) Nice Number$ (customers + revenue) SuperHeroes & RockStars (your team) * note: the above are teaser images… they don’t really mean anything; they’re just here to capture your attention.
Pitch MY PROBLEM (not YOUR SOLUTION ) Post: “Your Solution is Not My Problem”
[Pardon The Blatant Commercial ]
Read Geoffrey Miller Sex + Evolution + Consumer Mktg = Awesome
500 Startups Fund & Incubator Mountain View, CA – Founded 2010 “ Design, Distribution, Data” 165+ Mentors in 10+ Countries Seed Fund + Startup Accelerator 20-25 accelerator companies @ 3x/yr 50-75 / yr seed investments Fund I: 180+ Companies Twilio Wildfire SendGrid Erply (EST) MoonFruit (UK) MyGengo (JPN) BugHerd (AU) ChinaNetCloud (CH)
[How to Pitch a VC (or Angel)]
10 Tips to an Awesome Pitch 1. Elevator Pitch 2. The Problem 3. Your Solution 4. Market Size 5. Business Model ($) 6. Proprietary Tech 7. Competition 8. Marketing Plan 9. Team / Hires 10. Money / Milestones Demo Goes Here Teaser Image Goes Here
10 Slides to an Awesome Pitch 1. Elevator Pitch 2. The Problem 3. Your Solution 4. Market Size 5. Business Model ($) 6. Proprietary Tech 7. Competition 8. Marketing Plan 9. Team / Hires 10. Money / Milestones Demo Goes Here Teaser Image Goes Here Cu$tomer Testimonial$ “ This Shit Rocks .” The Money Shot: Demo Screen Shots Video Business Metrics (NOT Revenue Projections) AARRR!
1. The Elevator Pitch ( only 30 sec! ) Short, Simple, Memorable: “ What , How , Why .” 3 key words or phrases “ Mint.com is the free, easy way to manage your money online.” No expert jargon… just KISS . Remember to Have Fun  (…. when you pitch ------> )
2. The Problem What is The Problem ? … Make it Obvious . “ Ouch . Yeah, I have that too…” Who has it? “ Painkiller not Vitamin ” also see blog post: “ Your SOLUTION is not my PROBLEM ”
3. Your Solution Great Products & Companies do 1+ of 3 things: Get You LAID (= sex) Get You PAID (= money) Get You MADE (= power)
3. Your Solution Great Companies do 1+ of 3 things: Get you LAID (= sex) Get you PAID (= money) Get you MADE (= power) Describe why your Solution: Makes your customers Happy Does it better, different than anyone else “ NICHE to WIN” (Customer Case Study can also go here)
[ The Money Shot ] http://Jing.com http://ScreenCast.com http://Flickr.com http://YouTube.com http://Scribd.com http://SlideShare.com Demo Screen Shots Video PRACTICE! PRACTICE! PRACTICE! demo will FAIL -- have a backup (screenshots, local video, interpretive dance) expect to be interrupted
[ The Money Shot ] http://Jing.com http://ScreenCast.com http://Flickr.com http://YouTube.com http://Scribd.com http://SlideShare.com Demo Screen Shots Video PRACTICE! PRACTICE! PRACTICE! demo will FAIL -- have a backup (screenshots, local video, interpretive dance) expect to be interrupted and remember : The Script is NOT your Slides – The Script is the FACE of your Audience
4. Market Size Bigger is Better Top Down = someone else reported it Forrester, Gartner, Your Uncle
4. Market Size Bigger is Better Top Down = someone else reported it Forrester, Gartner, Your Uncle Bottom Up = calculate users/usage/rev$ Avg Txn = $X Y customers in our market Avg customer buys Z times per year Market Size = $X * Y * Z annually = a big friggin’ # Market growing @ 100+% per year
5. Business Model (How Do You Make Money?) Describe Top 1-3 Sources of Revenue Prioritize by Size or Potential Common Revenue Models: Direct : ecommerce, subscription, digital goods Indirect : advertising, lead gen, affiliate
6. Proprietary Technology / Expertise VCs *really* like unfair advantages: BIG market lead experienced team “ superior” technology
7. Competition (why you’re better *or* different ) List *all* competitors Show how you’re better … … or at least different if not better or different then -> “NICHE TO WIN”
Better or Different . Funny! Shocking !!! Accepted Not Funny.
8. Marketing Plan PR Contest Biz Dev Direct Marketing Radio / TV / Print Telemarketing Email SEO / SEM Blogs / Bloggers Viral / Referral Affiliate / CPA Widgets / Apps LOLCats … how do you get customers & distribution ? lots of channels & decisions… choose a few :
8. Marketing Plan PR Contests Biz Dev Direct Marketing Radio / TV / Print Telemarketing Email SEO / SEM Blogs / Bloggers Viral / Referral Affiliate / CPA Widgets / Apps … how do you get customers & distribution ? lots of channels & decisions… choose a few : 3 Things That Matter / To Measure : Volume Cost Conversion
9. Team People that get VCs Hot: Geeks with deep tech experience Entrepreneurs who have sold companies Sales/Marketing who bring in customer$
10. Money, Milestones How Much Money ? 3 Budgets: Small , Medium, Large What will you do with Capital ? New Hires (Build Product ) Mktg & Sales (Get Customers / $$$ ) Ops & Infrastructure ( Scale Up)
Financing Raised $200K Seed round Jan 08 @ $1M valuation angel investors: Ron Conway, Larry Page, Bill Gates built initial prototype; functional use with 1000 customers Seeking $500K-$1M Series A round @ $2.5M valuation already closed $300K meetings with 5 other VCs in next 2 weeks targeted closing in 4 weeks Use of Proceeds / Product Roadmap / Goals $300-500K: hire 2-3 engineers, 1 marketing / sales, .5 PT customer support $200-500K: marketing campaigns & customer acquisition get to 25K customers, $1M revenue by end of year estimated break-even in Q4 / 09 @ $100K / month
Additional Resources Dave McClure : Startup Metrics for Pirates ( AARRR !) ZapMeals Sample Pitch Presentation Master of 500 Hats Blog: “Greatest Hats” (top blog posts) Steve Blank : 4 Steps to Epiphany, Customer Development Methodology Eric Ries : StartupLessonsLearned Sean Ellis : Startup-Marketing.com Andrew Chen : AndrewChenBlog.com Brad Feld, Jason Mendelson : AskTheVC.com Aydin Senkut : Felicis Ventures blog Mark Suster : Both Sides of the Table VentureHacks.com StartupCompanyLawyer.com

More Related Content

10 Tips on How to Pitch a VC (FOWA, London)

  • 1. 10 Tips on How to Pitch a VC Dave McClure 500 Startups FOWA London, October 2011 [email_address] / @DaveMcClure
  • 2. Essential Elements of your Pitch Elevator Ride (30-sec quick pitch) The Money Shot (demo) Size Matters (market) Nice Number$ (customers + revenue) SuperHeroes & RockStars (your team) * note: the above are teaser images… they don’t really mean anything; they’re just here to capture your attention.
  • 3. Pitch MY PROBLEM (not YOUR SOLUTION ) Post: “Your Solution is Not My Problem”
  • 4. [Pardon The Blatant Commercial ]
  • 5. Read Geoffrey Miller Sex + Evolution + Consumer Mktg = Awesome
  • 6. 500 Startups Fund & Incubator Mountain View, CA – Founded 2010 “ Design, Distribution, Data” 165+ Mentors in 10+ Countries Seed Fund + Startup Accelerator 20-25 accelerator companies @ 3x/yr 50-75 / yr seed investments Fund I: 180+ Companies Twilio Wildfire SendGrid Erply (EST) MoonFruit (UK) MyGengo (JPN) BugHerd (AU) ChinaNetCloud (CH)
  • 7. [How to Pitch a VC (or Angel)]
  • 8. 10 Tips to an Awesome Pitch 1. Elevator Pitch 2. The Problem 3. Your Solution 4. Market Size 5. Business Model ($) 6. Proprietary Tech 7. Competition 8. Marketing Plan 9. Team / Hires 10. Money / Milestones Demo Goes Here Teaser Image Goes Here
  • 9. 10 Slides to an Awesome Pitch 1. Elevator Pitch 2. The Problem 3. Your Solution 4. Market Size 5. Business Model ($) 6. Proprietary Tech 7. Competition 8. Marketing Plan 9. Team / Hires 10. Money / Milestones Demo Goes Here Teaser Image Goes Here Cu$tomer Testimonial$ “ This Shit Rocks .” The Money Shot: Demo Screen Shots Video Business Metrics (NOT Revenue Projections) AARRR!
  • 10. 1. The Elevator Pitch ( only 30 sec! ) Short, Simple, Memorable: “ What , How , Why .” 3 key words or phrases “ Mint.com is the free, easy way to manage your money online.” No expert jargon… just KISS . Remember to Have Fun  (…. when you pitch ------> )
  • 11. 2. The Problem What is The Problem ? … Make it Obvious . “ Ouch . Yeah, I have that too…” Who has it? “ Painkiller not Vitamin ” also see blog post: “ Your SOLUTION is not my PROBLEM ”
  • 12. 3. Your Solution Great Products & Companies do 1+ of 3 things: Get You LAID (= sex) Get You PAID (= money) Get You MADE (= power)
  • 13. 3. Your Solution Great Companies do 1+ of 3 things: Get you LAID (= sex) Get you PAID (= money) Get you MADE (= power) Describe why your Solution: Makes your customers Happy Does it better, different than anyone else “ NICHE to WIN” (Customer Case Study can also go here)
  • 14. [ The Money Shot ] http://Jing.com http://ScreenCast.com http://Flickr.com http://YouTube.com http://Scribd.com http://SlideShare.com Demo Screen Shots Video PRACTICE! PRACTICE! PRACTICE! demo will FAIL -- have a backup (screenshots, local video, interpretive dance) expect to be interrupted
  • 15. [ The Money Shot ] http://Jing.com http://ScreenCast.com http://Flickr.com http://YouTube.com http://Scribd.com http://SlideShare.com Demo Screen Shots Video PRACTICE! PRACTICE! PRACTICE! demo will FAIL -- have a backup (screenshots, local video, interpretive dance) expect to be interrupted and remember : The Script is NOT your Slides – The Script is the FACE of your Audience
  • 16. 4. Market Size Bigger is Better Top Down = someone else reported it Forrester, Gartner, Your Uncle
  • 17. 4. Market Size Bigger is Better Top Down = someone else reported it Forrester, Gartner, Your Uncle Bottom Up = calculate users/usage/rev$ Avg Txn = $X Y customers in our market Avg customer buys Z times per year Market Size = $X * Y * Z annually = a big friggin’ # Market growing @ 100+% per year
  • 18. 5. Business Model (How Do You Make Money?) Describe Top 1-3 Sources of Revenue Prioritize by Size or Potential Common Revenue Models: Direct : ecommerce, subscription, digital goods Indirect : advertising, lead gen, affiliate
  • 19. 6. Proprietary Technology / Expertise VCs *really* like unfair advantages: BIG market lead experienced team “ superior” technology
  • 20. 7. Competition (why you’re better *or* different ) List *all* competitors Show how you’re better … … or at least different if not better or different then -> “NICHE TO WIN”
  • 21. Better or Different . Funny! Shocking !!! Accepted Not Funny.
  • 22. 8. Marketing Plan PR Contest Biz Dev Direct Marketing Radio / TV / Print Telemarketing Email SEO / SEM Blogs / Bloggers Viral / Referral Affiliate / CPA Widgets / Apps LOLCats … how do you get customers & distribution ? lots of channels & decisions… choose a few :
  • 23. 8. Marketing Plan PR Contests Biz Dev Direct Marketing Radio / TV / Print Telemarketing Email SEO / SEM Blogs / Bloggers Viral / Referral Affiliate / CPA Widgets / Apps … how do you get customers & distribution ? lots of channels & decisions… choose a few : 3 Things That Matter / To Measure : Volume Cost Conversion
  • 24. 9. Team People that get VCs Hot: Geeks with deep tech experience Entrepreneurs who have sold companies Sales/Marketing who bring in customer$
  • 25. 10. Money, Milestones How Much Money ? 3 Budgets: Small , Medium, Large What will you do with Capital ? New Hires (Build Product ) Mktg & Sales (Get Customers / $$$ ) Ops & Infrastructure ( Scale Up)
  • 26. Financing Raised $200K Seed round Jan 08 @ $1M valuation angel investors: Ron Conway, Larry Page, Bill Gates built initial prototype; functional use with 1000 customers Seeking $500K-$1M Series A round @ $2.5M valuation already closed $300K meetings with 5 other VCs in next 2 weeks targeted closing in 4 weeks Use of Proceeds / Product Roadmap / Goals $300-500K: hire 2-3 engineers, 1 marketing / sales, .5 PT customer support $200-500K: marketing campaigns & customer acquisition get to 25K customers, $1M revenue by end of year estimated break-even in Q4 / 09 @ $100K / month
  • 27. Additional Resources Dave McClure : Startup Metrics for Pirates ( AARRR !) ZapMeals Sample Pitch Presentation Master of 500 Hats Blog: “Greatest Hats” (top blog posts) Steve Blank : 4 Steps to Epiphany, Customer Development Methodology Eric Ries : StartupLessonsLearned Sean Ellis : Startup-Marketing.com Andrew Chen : AndrewChenBlog.com Brad Feld, Jason Mendelson : AskTheVC.com Aydin Senkut : Felicis Ventures blog Mark Suster : Both Sides of the Table VentureHacks.com StartupCompanyLawyer.com