Start by pitching to someone you know that is intelligent, perhaps from a different field, who can be honest in their feedback and press hard on your plan. This will help you to identify the holes in your plan and prepare you for the professional discussions you will have going forward.
Once you have done this, carefully research your potential investors. Learn about their focus areas and their philosophy. Then, go to venture capitalists who have financed firms similar to your own; they will understand what you are saying. Some VC’s are very hands-off, whereas others regularly become quite involved with the operations of their portfolio companies. Be sure to talk to those that more closely match your needs. Once you have identified a good match, be sure to talk to the right person within the firm. For example, if your idea is in the realm of medical technology, be sure that you are speaking to those people in the VC firm.
In regards to presentation style, VC’s want to see visionaries who are passionate about their idea. As such, you should be able to talk without using notes or looking at the projector screen. The VC is investing in vision and passion, so show it. Your style is important because you have to be able to sell. Even if you secure the first round of financing, if your company is going to go public you will need additional rounds. You have to be able to sell to investors, partners, and customers. When you are giving the pitch, project confidence by not speaking too quickly. Show preparedness by including answers to expected questions in the presentation. Finally, project the image that the train is leaving, and if the VC’s do not get on now they will miss out.
Signs you should not pursue VC:
In my opinion, pursuing VCs may not be the most strategic way for a young person to raise capital early on in their career. Because of the preferential rights included in the upfront agreement, there is less space for the entrepreneur to really capitalize on the later (and larger) successes of the company down the road. I believe it is more beneficial to begin with HNW individuals who share in the same mindset.
So, unless you can reach a great VC independently or with help from others quickly, my suggestion is to wait with testing your CEO skills until Venture Capital, not the economy recovers. If you can.
The entrepreneur needs to be the lead communicator:
You want to over-communicate your plan to your management, your partners, your financiers, etc. Eat, sleep, and live to communicate your vision. Tone, voice, and direction should all come from the visionary. Embracing the responsibility is a powerful and effective means to keep the company focused on the promise and primary tasks. You are constantly selling, even to the point of oversell, the goals and dreams of the company. Whether speaking to employees, investors, customers or press, if the one who created the dream isn’t the champion, they have little right to ask anyone else to believe in it.
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