Money for Nothing (Apart from a Great Idea and Plenty of Hard Work)

painting of two businessmen

For those of you/us looking for Venture Capitalists to fund a start up, below are some tips that come courtesy of the University of San Francicso’s Silicon Valley Immersion Program.

I am studying for an MBA at DIT, and had the good fortune to attend the program late last year as part of my class’s foreign trip. (A previous post on the jaunt is here).

On the program, I was surprised at the extent to which they actually studied and perfected elevator pitches. We had a couple of different classes on the topic, and the main points are listed below. The main purpose of a pitch, your initial contact with a potential investor, is to pique their interest and get a follow-up meeting.

It’s a bit like applying for a job and sending a resume: Your purpose is not to get employed but to get to the next step, the interview.

Here are the main points:

  1. Give team member names and a very brief background.
  2. Company name and a very clear description of what the business is.
  3. The market opportunity or customer problem, “the pain,” you intend to address. You should include your target market characteristics and size.
  4. Your company’s product or service, and the unique benefit to address market opportunity.
  5. Your potential source of sustainable competitive advantage. This could be intellectual property, your brand or distribution. Some VCs like to think of this as an “unfair advantage.” This is not to suggest anything illegal be done. What they are looking for is a potential business that will be able to protect itself from competition.
  6. Brief but specific marketing and sales strategy.
  7. The revenue model: i.e. how do you get paid?
  8. Major milestones and timeline to profitability.
  9. Amount of financing needed and how it will be used.
  10. Restate the nature of the opportunity.

Some additional, related suggestions to include are below. These may be questions that get asked if you are called to a longer, second meeting.

  1. Your extended team. This includes mentors, advisers and the like.
  2. Customer anecdotes.
  3. Your product’s status. Do you have a working website? A prototype? A minimum viable product?
  4. Risks and threats from competition or potential competition.
  5. A “grand vision” about the industry or the world. But, if Leader of the Universe is your ambition, be prepared to spell out how that will happen.

Painting courtesy of HikingArtist.com on Flickr.