The X Factor

The title of this blog is “The X Factor” which doesn’t really fit, but if there are any of you out there that watch the British TV show of the same name, you’ll catch my drift. (I’m a big Simon Cowell fan)

I’ve already been over the amount of companies I speak to on a weekly basis about venture capital financing, passion it take to impress our investment firm and model, motivation, etc. But I have yet to talk about something else: Time. At the end of the day, the longer someone’s presentation is, the less impact it has on me. Now, I’m not saying I don’t care or don’t pay attention to the presentation or demo, it’s just that some folks have trouble getting to the point, which is the important stuff…What does your product do? What pain point does it address/take away from the consumer and how do you generate revenue? From there we can fill in the rest of the time with questions on models, frameworks, etc…

Fred Wilson, who is a Venture Capitalist at Union Square Ventures (early state capital) commented on this a couple days ago, and though our roles are different, I most likely see the same presentations he does and speak with the same entrepreneurs he probably does. http://www.avc.com/a_vc/2009/10/just-try-it-out.html.

The best presentations I’ve seen are the engaging ones, short sweet and to the point. I like entrepreneurs to ask questions, put me in the position of one of their customers, play into my emotions a bit and let me fall in love with the solution their product provides. Too many times an entrepreneur misses the point and sends me a 30 page investor presentation that reads like “The Catcher in the Rye” (not that this is a bad book note, but you get the point).

Here are my top five important things to remember for giving an investor presentation to venture capitalists:

1. Be concise, over simplify the product or solution because you never know the background of the person you’re speaking to.

2. Be engaging. You want us to ask questions and if we aren’t asking questions something is wrong.

3. Case studies. Be able to prove that your solution works and have customer case studies in your back pocket to walk us through. This is obviously geared towards expansion stage companies looking for growth capital.

4. Don’t be shy or dry. If you are giving us one word answers to our questions, you are making it too difficult to probe and something is wrong.

5. Make us remember you and your product. Venture capital folks have lots of these conversations. The best ones stick with us and we share your story with our co-workers.