VC Firms look to say “no” (Continued)


PresentationAs a continuation from my last blog, I would like to add what are the red flags that weigh heavily against an entrepreneur in a presentation to VC firms.

Recently I attended an event where several startups pitched to a major Silicon Valley VC firm. The presenter introduced the company as being funded by a “serial” entrepreneur. The VC head immediately criticized that term – “serial” – why? On account that if the company faces difficulties or has enough success, that entrepreneur will bolt as soon as possible. Even if successful, it does not help to describe the entrepreneur as having continuing success. He might have the misfortune in founding a new company that might fail. The presentation for the new company must stand on its four legs, not on the past successful companies. Further, during the due diligence, the potential investors will discover the past track record and weigh the relative merits of the new venture.

What many new entrepreneurs don’t realize is that during the short period of time during a presentation, every word is key. The audience will pay close attention to what is being said. They are sensitive to clichés. How often have I heard the words, “disruptive technology”? Again, any wrong remark can be fatal. I always recommend that presenters practice their pitch alone and in front of others. They should focus on the best, salient features of their company. I always suggest to be straight-forward. Get to the facts. Be enthusiastic of the market opportunity.

At another pitch session, I heard one from one of the VC guys say that the presenter was too slick and extremely confident and cocky. And it is not the first time I have heard this. I once brought in a Yale doctor with a medical app for clinical management. Having been a surgeon, he had direct experience in the field. But I could tell from the tenor from his pitch, he was too cocky. I guess that if you are asking money from a third party, one should behave humbly. So from that experience, I have noted that even attitude has an impact on the audience.

I personally believe that theatrical actors are extremely qualified to pitch to investors. Indeed, I participated in a startup training program managed by formally trained actors. Every cadence and attitude count in the presentation, as if one stood in front of a stage. The quality makes a lot of difference. I recall a former colleague commenting that as a CFO of a publicly traded company, he participated in these pitches in the East Coast. He observed that there many company with great pitches but mediocre products attract capital, while those with weak pitches with great products failed to do the same.

My recommendation is to avoid clichés or controversial descriptions. Pitch with confidence without arrogance. Practice that pitch over and over again while avoiding those pitfalls.

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About Juan Ramón Zarco, SVVGP 胡安•雷蒙•扎尔科

Juan Ramon Zarco, 胡安•雷蒙•扎尔科, Silicon Valley Ventures Growth Partners llp, Hygieia Healthcare Technologies Company, AllRest Technologies LLC, Crimson Growth Partners LLP, jrzarco2001@yahoo.com, is an experienced as CxO, General Counsel and Secretary to public and private companies with global operations. Established track record of producing practical, revenue-focused solutions. As Counselor and Secretary, demonstrating vision, integrity, and sound business judgment, to CxOs. Managed complex, strategic transactions, M&A, contracts support, PE Financing, IPO, SEC compliance, Corporate/HR governance, IP licensing, Budgeting, Staff, outside counsel management, International market access strategies, Domestic & foreign government relations and advocacy. Creative in designing and implementing market access strategies. Practices law beyond conventional model with low-overhead and project-based fees. Effective at managing departments, formulating marketing strategies, balancing budgets, and implementing cost-saving measures. Extensive in-house and private practice experience, advising clients on commercial, corporate, international business, and technology law and policy. http://www.docstoc.com/video/89135472/make-your-business-an-international-presence; http://www.youtube.com/watch?v=fx5gijf3yoc For Sprint, he managed iDen international development in Southeast Asia, Middle East, and Africa, and contractual issues with Verizon. In Private Equity, he worked with Pegasus in vetting international investment deals and interim President for portfolio companies, such as Data Foundation, a data storage company, handling marketing, strategy, fund raising, and accounting. Before Pegasus, Mr. Zarco, as CLO and V.P. of Corporate Development, played a principal role in the structuring, international expansions for 2 telecom companies, U.S. Cable Group and Viatel, Inc. in financing and M&A deals exceeding $200 million. Mr. Zarco earned a J.D. from NYU Law School, M.B.A. from Cornell, and B.A. from Williams College; is fluent in Spanish, Portuguese, French, and German, with working knowledge of Russian, Arabic and Japanese.
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