What the Dragons Won’t Tell You – What NOT to Do When Pitching for Venture Capital November 30, 2011 RICCentre By Saadia Muzaffar It’s no secret that the hot topic for all entrepreneurs is where to find start-up capital and funding for their new business or idea and how to do it right given the usual resource scarcity that accompanies any start-up. I attended the SociaLIGHT conference this past weekend – out of the many sessions, this is the scoop on one of my favourite discussions, titled ‘The Funding Panel’. It had a good cross section of money-people including VC, OMERS (one of Canada’s largest pension funds), a funding advisor for start-ups (Venture Deli), Canadian Youth Business Foundation, and a partner in Start-up Weekend. Here is what NOT to do when seeking investment $$$ for your idea from a VC or angel: Pitfall # 1 – Going in cold into the VC den: Unanimous agreement by the panel on this one – calling or e-mailing someone who is an angel or VC out of nowhere in hopes of getting their attention is almost guaranteed to fail. Expert Advice: Spend the time building your network to include someone who knows the VC or angel you are looking to approach. Get introduced. A warm lead-in is far more likely to yield a personal meeting. Being vetted by one of their peers will go a long way in helping you stand out in a very noisy environment. Pitfall # 2 – PowerPoint Overload: Many entrepreneurs mistakenly think that providing a deep and detailed look at all the moving pieces in their eco-system will ensure that the investors know they’ve been thorough. Unfortunately, that often leads to an onerous 50 minute, 20 slide PowerPoint resulting in a bored investor who mentally checks out 10 minutes into the pitch. Expert Advice: Simplify, simplify, simplify. Remember that you’re pitching to someone who gets pitched to ALL THE TIME. Get their attention with what your idea is, why you are the best person to be helming this, and how you will make money from it. 7-10 slides, 20 minutes of talk time maximum. Pitfall # 3 – A Low Voltage Team: Some of the greatest ideas have been compromised in the funding world by entrepreneurs underestimating the importance of a solid management team. Expert Advice: No one is expecting you to know all in the realm of your business. What funders do want to see is a solid team that compliments your strengths and bridges your weaknesses. A team that will give you seasoned advice and bring domain specific acumen to the table. This includes both your management team and also your advisory team. On the surface, their advice seems simple. But sometimes it’s the simplest things that can make profound difference to a business – translating mere promise to rocking, scalable success. Saadia joins the RIC team as the Operations Coordinator responsible for building and execution of activities that fulfill RIC’s mandate. She brings several years of relationship management, corporate communications and operations experience mainly from the financial services industry. The RIC blog is designed as a showcase for entrepreneurs and innovation. Our guest bloggers provide a wealth of information based on their personal experiences. Visit RIC Centre for more information on how RIC can accelerate your ideas to market.