Winning Venture Capital Pitches
By DONNA BOGATIN • Mar 29th, 2008 • Category: BIG PICTUREBlogging VCs public rating of entrepreneurs’ (supposedly) confidential pitch sessions are often entertaining, but generally unfulfilling. Joshua Kopeleman’s performance tattletaling on anonymously named “fist” and “second” entrepreneurs that he apparently met with at First Round Capital, for example.
“Of course you realize that every person who pitched you this week is now anxiously recalling their meeting and asking the question, am I one of these guys,“ Keith Teare aptly commented at Kopelman’s blog.
What’s more, entrepreneurs pitching before First Round Capital may be wary going forward of what may subsequently be “anonymously” posted about their performances at the Kopelman blog.
Instead of hearsay style public sharing of vague “feedback” on non-public VC pitch sessions, a direct sharing of explicit best practices for typical Venture Capitalist Q & A would undoubtedly offer startups greater insights into how to prepare a winning pitch.
First Round Capital hails it is “not afraid of investing in pre-revenue companies.” Sounds good, but what is the best way for a pre-revenue startup to demonstrate to Kopelman that it WILL get to revenues, sooner rather than later, bigger rather than smaller?
I believe an entrepreneur’s assumptions–and the basis for those assumptions–are core differentiators between financing pitches. Investors seek big market opportunities, but only back businesses with grounded plans to exploit them.
I had the pleasure of helping wrap up the Council For Entrepreneurial Development’s Tech 2007 conference in Research Triangle, participating in the Media Panel, along with Don Dodge, Microsoft, and Eric Auchard, Reuters. Serial entrepreneur Edward Iacobucci presented the keynote.
Iacobucci began by noting he was a ‘geek” before it was fashionable, way back in the 70’s. Nevertheless, Iacobucci’s message to tech entrepreneurs was “business models drive disruption, not technology.“ Technology is an “agent for change,” but it is “new applications of technology” that creates market disruption, Iacobucci said.
Iacobucci founded DayJet in 2002 to create a new, big market opportunity by building “the world’s first per-seat, on-demand jet service” and he needed a lot of capital to set about to do it.
How does an entrepreneur illustrate an ability to build market share in a market that doesn‘t yet exist, I asked Iacobucci. Realistic assumptions and attainable objectives must form the foundation of financial projections, Iacobucci indicated.
DayJet performed extensive econometric modeling involving detailed census data to build geographically-targeted service roll-out business plans that accounted for diverse consumer demand and logistics scenarios to demonstrate how regional air transportation could be successfully disaggregated.
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DONNA BOGATIN is the Founder & CEO of STARTUP ALPHA
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