So how can you make yourself heard through all the noise? Here are seven things you need to have to impress me.
1. Have a Real Business in Place
Sounds obvious, right? But just because you have a so-called “million-dollar idea” doesn’t mean that there’s an actual business in there. A VC is going to be more interested in funding a company that actually has a functioning business in motion–and not something that’s going to get acquired or flipped for a quick buck.
The best place to start is by creating a solid business plan that lays out what your business does, what the market’s like, how the business is organized, and how much funding is required. Even if you don’t use the same business plan when you go into your meeting, planning all of this out early allows you to fix any problems.
2. Start Networking
You’ve got your business plan in hand. Now what? Before you start cold-calling or emailing VCs, start networking and get an introduction prior to asking for money.
Start by identifying the VCs that you want to do business with. Once you’ve identified them, start getting in good with their contacts. If you could make a great impression on someone who influences them, then you’re already in. Even if that doesn’t happen, that start connecting with them on Twitter or LinkedIn. Also consider pulling resources like college professors, CEOs, or finance attorneys to get that all-important introduction.
Honestly, if someone comes to me without a connection to me… I’m not going to invest in them, period. You need to network like crazy.
3. Follow the 10/20/30 Rule of PowerPoint
This isn’t exactly new–Guy Kawasaki wrote about this back in 2005, but it’s still a useful tactic when trying to impress a VC. Basically, this rule states that your presentation should only be 10 slides, last no more than 20 minutes and use a font that is at least 30 points. The slides should cover the following:
- Your solution
- Business model
- Underlying magic/technology
- Marketing and sales
- Projections and milestones
- Status and timeline
- Summary and call to action
4. Be Compelling
There’s no shame in being afraid of public speaking. We’ve all experienced that dread at some point, but don’t let the fear and anxiety overtake you during your presentation. If you’re passionate, sincere, and honest, VCs will see that. They’ll notice that you’re an individual who truly believes in what what you’re selling. And that makes you compelling.
You don’t have to do cartwheels or put on a song and dance. Be prepared. Practice. Smile. Look at your audience. And let the VC know how much this business means to you.
5. Prove That You’ve Done Your Homework
Pull out facts and figures that illustrate that there’s an actual market for your idea. Mention the competition and what makes you different. Tell a great traction story to prove that your business can generate revenue. According to investor Brendan Baker, only 5 percent of pitches tell a great traction story. If you really want to stand out, be a part of that small minority.
6. Be Realistic
At the same time, be realistic. Don’t try to be sneaky and trick investors with made-up or inflated numbers. Investors will see right through it. Provide and present accurate information in a plan that includes the most important drivers for revenue (amount of customers, selling price) and costs (sales and marketing expenses, costs of goods sold).
7. Don’t Get Fooled
Investors aren’t out to get you. When they ask you a trick question, they are intending to see how knowledgeable and motivated you are. One such trick question would be asking if they could hire a CEO at some point, or whether you see yourself as the long-term CEO. Don’t get offended or beat around the bush. A response like “I want to build a great company and am willing to step aside” should impress them.