HOW YOUR PITCH IS RECEIVEDSean Owen
(Pentech Ventures)
8 November 2011
(Your Mileage May
Vary)
You’re (Also) the Star
• Great entrepreneurs make the world go ‘round
• Investors need great entrepreneurs
• Investors would kill to hear great pitches
• What does a great pitch sound like?
A Business Plan A Day
• Typical fund sees hundreds per year
• … and invests in a handful
• Most investments aren’t from inbound plans
• Stand Out Quickly
Exceptionalism
• Early-stage model must pursue exceptional returns
• Why is this plan exceptional?
Who Reads Your Message?
• Small funds: partner• Medium-large funds: associate
• Sourcing just one job• Do the math: less than an hour total to justify more time
What’s in an Investment Memo? • Non-disclosure agreement?
• Not to read the IM• Investors don’t want or need secrets yet• Looks naïve, problematic for investor
• Executive Summary / IM• How much do you expect
someone to digest in 15 minutes?• <= 7 pages; advisors send 1-2• Not a complete business plan• An appetizer, not a meal
What’s in an Investment Memo? (cont.)
• Presentation• Optional; the “movie” to the IM’s “book”• Works better in person; send if really cool• 10-20 slides
• Financials• Optional; high-level financials in the IM• 12 months, then 2 more years P&L
First Impressions Count
• Minor things are major, in 15 minutes
• Guess you come across the same to customers
• Attention to detail = passion, goodness
• Easy, quick read appreciated by the busy
Strengths and Weaknesses
• Product• What is it?
• Market• How much can
realistically be sold per year?
• Revenue• How does it make
money?• Customers?
• Competition• What else solves the
problem?
• Team• What’s the team’s unfair
advantage?
• Deal• How much?• Where does it reach to?
A Reason To Invest?
• Accept IM’s premises: any good reasons to invest?
• Disqualify: wrong stage, sector, geography
• So, fund can invest• Decision: Meeting? ?
Reasons to Not Invest?
• Investor mostly believes 80%
• Investor doubts about 20%: reasons not to invest
• Goal: Beat the 20%X
The Meeting
• Receive details days in advance• Business plan• Financials
• Target 60 minutes• Good warm-up: 15 minutes summarizing business
The Meeting (cont.)
• Frequent: Investor leaves still holding doubts
• Infrequent: Investor leaves wanting more talking
• Listen, modulate, ask questions
From There?
• Fund Monday meeting• Find partner champion;help her help you
• 1-2 more meetings• Now about relationship• Diligence: you, and the fund
• CLOSE!
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