After attending a recent Startup Meetup hosted by Founder Institute CEO, Adeo Ressi, local blogger, Lydia Snider, shared her experience and the valuable lessons she learned about the art and science behind what it takes to get startup funding.
Below Lydia's post on How to Pitch to VCs by Adeo Ressi has been republished;
"Santa Cruz has a reputation for being a sleepy surfer town, but what most people don’t realize is that it is also a hotbed of innovation. I went to Santa Cruz Techraising’s “Pitch Your Idea to Adeo Ressi” event to find out what my fellow Santa Cruzians are up to these days and learn a thing or two about crafting a VC pitch. I didn’t expect to laugh my ass off all night.
The social media geek in me was twitching, wishing the event were being recorded and I was posting video snippets of his responses. Out of respect for the event and the brave souls who dared to sit in the hot seat, I instead scribbled down Adeo’s hilarious pearls of wisdom as best I could. Something you really must experience for yourself.
Adeo’s Summary of the Start up Funding Game
- Entrepreneurship is waterboarding (torturing) yourself.
- Pitching is a grind. It’s a treadmill of sandpaper. The people who get the funding are the ones who survive the grind.
- Once you’re funded, it’s waterboarding yourself with two pitchers of water instead of one.
Adeo’s Pitch Tips
Don’t ever use adjectives or superlatives. You may think your idea is the best, the greatest, the first. Chances are the VC you are talking to has heard that same idea 100 times in the last two weeks. Ideas come in waves; if you thought of it, chances are at least 975 other people did too.
His advice: Don’t squander your precious time in front a VC on superlatives. Just tell them what you product is, who buys it and what problem it solves.
All businesses have one customer. Tell me who you are helping – and it can’t be half of humanity. Yes you want to have a broad customer base, and it needs to be a specific segment of humanity. “Men” is not a specific segment. That is half of humanity.
The customer is who is paying. Always focus on the people with the money – especially when you are creating the market place.
Use the phrase, “My widget helps specific segment of humanity to” instead of “I’m helping them by….”
Never, Never, Never, Ever Start your pitch with Questions. 1) Unless you are actually gathering market data you are wasting time you could be spending talking about your business. 2) If no one engages you, you’re screwed.
You spend all day thinking about your business. Other's don't. Avoid giving partial information. If there are 10 parts to you model, provide all 10. If you don't, you will lose your audience.
Don’t lead with a clever phrase or your data – Always start with what you are creating. People need the context first for you stats or clever phrase to make sense. Otherwise they will be confused as to what you are trying to accomplish. Resist the temptation to be what you think is a great showman. Trust Adeo on this; your stats or catchy phrase will be even more powerful when people know what you’re talking about.
Start with this phrase ”My company (insert name) is developing (insert a concrete item – website, mobile app, software etc) to solve (name the problem) with (insert your secret sauce)”.
When your pitch is over, stop talking.
Congratulations, you’ve just earned your second pitcher for self waterboarding. Have fun!"
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