How to Impress a Venture Capitalist

Point: Get to the Point FastJason Mendelson

Story: Jason Mendelson, Managing Director of the Foundry Group, gave the following advice last night to entrepreneurs seeking funding:

  1. Send an executive summary, not a business plan – VCs are short on time. Grab their attention quickly. They don’t want to wade through a 90-page business plan at the get-go.
  2. Know your business better than anyone.
  3. Don’t ask for an NDA – that’s a rookie mistake. VCs look at so many business plans a year that if they signed an NDA, they’d almost certainly get sued.
  4. Have a 3-sentence elevator pitch about your business ready if you meet the VC informally.
  5. Be smart, but don’t be arrogant. Saying your product “has no competitors” is not believable.

Action: Do your homework before you approach the VC. VCs like Jason enjoy talking with entrepreneurs informally, such as at Boulder Open Coffees, but don’t have the fundraising conversation before you’re ready. When you are ready, be crisp and concise in your communication.

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4 Comments »Capital, Entrepreneurs, Opportunity

4 Responses to “How to Impress a Venture Capitalist”

  1. Brett Borders Feb 27th 2009 at 09:44 am 1

    I totally agree with #3. I hate NDAs. I have never, and I repeat, NEVER… been asked to sign an NDA my a prospective client or partner that didn’t turn out to be a paranoid waste of my time and theirs. It’s always seems to be a bunch of hype over nothing.

  2. Andrea Meyer Feb 28th 2009 at 07:02 pm 2

    Good point, Brett. I?ve noticed that the people most concerned with an NDA seem to be the ones who think that just the idea is enough, rather than its execution. Thank you for sharing your experience!

  3. Mark Solon Apr 17th 2009 at 09:27 am 3

    Here’s another:

    don’t feel that you’ve got to pitch a vc the first time you meet them. i ask entrepreneurs all the time to meet well in advance of needing capital. that way, you can tell me what you’re going to do, what milestones you’re going to hit. THEN, when we do talk financing, you’ve got concrete examples of your ability to execute…

  4. Andrea Meyer Apr 17th 2009 at 10:15 am 4

    Excellent advice, Mark, thanks! That approach gives entrepreneurs a way to start building a track record even when they’re just starting out.