Starting a business is a different journey for everyone. Some people get inspired and start rolling with their ideas until they run out of money. Others know how much they will need from the beginning and have a plan in place for every cent. Regardless of your approach, you will likely need financial help at some point in your process.
Venture capitalists do not merely help you get the funding you need to make your entrepreneurial dreams come true. They also help you build your business by accessing their own resources and networks to make sure that your company succeeds. Their goal is to see you go achieve massive success and either go public or be acquired someday, and when they choose to invest, it means they believe you can. Pitching to a VC is your chance to show them what you’ve got and make a case for your potential.
We were fortunate enough to catch up with Justin Caldbeck, American businessman, financier, philanthropist, prominent Silicon Valley venture capitalist, and former Duke University basketball player to learn a few factors that companies looking for funding should keep in mind when pitching. Caldbeck is the former co-founder of Binary Capital and was a longtime partner at Lightspeed Venture Partners and Bain Capital Ventures and has over a decade of experience working in VC/Angel investing, and this is what Justin Caldbeck had to say.
Be Professional, But Be Yourself
Think through why you are the perfect person to build this business and why now is the point in time in which this company should be built,” said Justin Caldbeck.
Most venture capitalists want to know the person they will be working with. Your business idea gets you in the door. Whether or not your personality and values fit with what the firm is looking for will be a major determinant of funding. Put your best foot forward in communicating your traction and why your business can be a large standalone company and let your passion for your business carry you through the meeting, says Justin Caldbeck.
Keep it Simple
Why is your product a “wow” experience?”
Make it easy to understand what problem your business solves, how it solves that problem, and any numbers backing up your statements. Investors are highly experienced in business, marketing, and branding. If they have to think too hard about what your company does and how it is done, then they will question your ability to reach your customers. The information you present should be straightforward, and the value in your products or services should be clear within the first 30 seconds.
Know Your Stuff
Stay focused. It’s ok to talk about the longterm vision of what the company can be over time, but it’s equally important to focus on the near term focused plan of attack. Also, Have an idea of how you’re going to spend the money and what you want to achieve with that from a metrics and team standpoint,” says Justin Caldbeck.
Hopefully, you will come to the meeting prepared to honestly answer questions about yourself, and you know your business inside and out. Answer questions about personal or business vulnerabilities honestly with a plan of action in mind. You should know how your products or services solve the market problems better than your competitors, what their weaknesses are, and how they may be a threat–if you do not, then study up. Additionally, be prepared with your vision for your company in the future at three years and five years. Know what you will do with the money you are funded and how long it will last.
Be Confident!
People fear public speaking more than death, and it is even harder when your business is on the line, according to Justin Caldbeck. The thing to remember is that venture capitalists are actively looking for companies to support. I think of a pitch as a great opportunity for an entrepreneur to share their vision of the future and evaluate potential funding partners in terms of which one would be the best to help them build their business.Now the most important task is to prepare a presentation that highlights the potential of your business and your talents as a founder.
Your preparation will require that you fit together many elements, and this list is not all-encompassing. However, using the advice found here will help you walk into your pitch meeting with confidence, connect with your listeners, and show everyone in the room your business has the ingredients for success.
This article appears in May 6 – Jun 14, 2020.