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June 5, 2011

Pitching Your Business To Venture Capital Firms

Any presentation you make to a venture capitalist has the same goal: to get them interested enough in your company to consider investing. These presentations are like any kind of presentation you’d make in the business world, but of course, they should be limited in scope to the important details about your business that a potential investor would be interested in. Before giving any presentations, make sure that you’re ready to answer any questions your audience may have about your company, including citations of facts and figures to back up your answers.

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Since venture capitalists are incredibly busy people, you need to keep your presentation short and to the point and remember this when designing your presentation: venture capitalists sit through several presentations per week, so yours has to stand out if you want to even be in the running to receive their backing. The following points should be part of your presentation; these will give your audience the facts you need as well as help them to remember your company:

  1. What your business does and how
  2. Your costs and your monetization strategy
  3. Why your company is positioned for success
  4. What stage of growth your company is in and the state of your business plan
  5. The important details on your target market (size, growth, demographics, projected trends)
  6. The unmet or undermet need your company will satisfy
  7. Your competition (this is one thing most entrepreneurs forget entirely in their presentations)
  8. How much investment your company needs to succeed
  9. How long your plan will take
  10. Your management team’s track record (the better it is, the better your chances of receiving funding)

Again, the idea of your presentation is to get investors interested and excited about your business. This isn’t the time to try negotiating terms; they’ll call you if they decide they want to know more. Don’t push your business too much. Enthusiasm is a good thing, but your presentation needs to be realistic as well. Venture capitalists hear far too many overoptimistic presentations, so don’t go overboard and you’ll be much more likely to be remembered by your audience.

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Think of it this way. The goal of venture capital firms is to make a profit. You need to convince them that investing in your business will help them do just that. You need to communicate to them that your business will grow quickly, become much more valuable and allow them to bring a strong ROI through a buyout or IPO within the space of 3-7 years.

After your presentation there will be a Q&A session. This is your chance to demonstrate to potential investors that you’re a perfect investment and that you are a competent manager who knows everything there is to know about your company, especially the financials. You need to be able to tell investors how quickly your business is growing and when it will be profitable. Make sure to include detailed plans for use of funds and capital expenditures – you don’t get a chance to make a presentation to venture capitalists every day, so take this opportunity to showcase yourself and your company.

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