Who Should Attend Your VC Pitch?

board roomThis post is part of my series called, “Pitching a VC” (link here) that covers what to do before, during and after your VC presentations.

In this post I want to cover the topic of which members on your team should attend the first VC meeting.

Let’s call this the “screening” meeting since it will almost always have at most 1 partner and sometimes won’t even have a partner but instead an associate or principal.

Option 1.  CEO attends on his / her own.  For a first meeting I think you can get away with just the CEO attending.  The argument for just the CEO is that this is a chance for the CEO to build rapport with the partner and 1-on-1 is often the best way to do so.  Obviously the other arguments for just 1 person attending are that the other staff can stay focused on the business and it may be a case where travel is involved so you want to keep costs to a minimum.  Note that if your company has two founders the non-CEO founder could attend provided that this person is commercial and is good with people (as opposed to the deeply technical guy).

Option 2. CEO attends with 1 or more staff. My preferred option is that multiple people attend even the first VC meeting.  VC’s invest in teams not individuals.  Even the most talented individuals in the world need great teams surrounding them.  It is rare that you a single person who is excellent commercially, technically, product wise, is a “people person” / great leader, runs good internal admin AND knows how to make money.  So if you have a great team then getting them all involved in the meeting is a great way to show that you have “a deep bench.”  If the VC is fielding a  partner then I believe this even more so but if the VC is fielding an associate then you can use your own judgment.

If you bring the full team make sure that you construct the entire storyline in advance so everybody knows how you plan to have the meeting flow.  Who is going to cover which slides, who is going to field which questions, how are you going to answer difficult questions (which you should write down in advance and practice).  Definitely don’t “wing it” – have practice sessions to see how each member performs.  Honestly I would say a good 50% of team presentations that I see seem like they really haven’t practiced the flow very well amongst team members.

Here are some pointers from things that sometimes don’t go well.  Try to avoid the following:

  • Big disagreements in front of the VC – Believe it or not it is not that uncommon where I’ll ask a controversial question to see how the team responds and you’ll see team members disagreeing on a topic.  I know that it is important within your 4 walls to allow dissent but the VC pitch isn’t the time for it.  If somebody answers a question in a way that you think didn’t put your best foot forward find a constructive way of adding to the point rather than disagreeing with your team member.  It never looks good if it seems like you’re discussing the topic for the first time or you disagree on the answher.  You wouldn’t do it in a customer meeting – don’t do it in our meeting.  My rule for VC meetings was the same that I had for sales meetings that I would attend with the sales staff – if a tough question comes up and the point person assigned to the topic doesn’t answer leave a moment of silence.  This is a queue for the most senior member in the room to pick up the question.  Or the point person can simply say, “why don’t I let Mike handle that question.”
  • CEO talks over staff – Even more common than an argument is the domineering CEO that talks over his / her staff.  As the CEO you need to pre-agree which questions your team is going to answer and which slides they’ll cover.  Practice the questiosn / answers amongst your team members before you get to the VC but when you’re at the meeting consider it a “live performance” and live with the results.  Far better that somebody says something in the wrong way than to have a CEO who talks over his staff.
  • Company sends the junior staff – I recently had a very interesting company approach me.  I met with a guy at a conference and he told me about his company.  I loved the idea.  He didn’t immediately tell me that he was head of biz dev and not the CEO.  No big deal.  But when it came time for a web conference call (he was from NorCal) and he walked me through the Powerpoint deck I saw the CEO title in his org chart slide and it wasn’t him.  Then I was annoyed.  Why wasn’t the CEO on the call?  If I’m willing to take my time out of my busy schedule to hear about the company why wasn’t the CEO taking the time out of his schedule?  My perception was that they clearly didn’t see me as the most important VC they were pitching or how could the CEO not be on the phone?  I said so.  The guy did his best to respond by saying, “I’m leading the fund raising.  It isn’t the CEO’s forte and he’s asked me to handle it.”  Wrong.  A large part of being a CEO is the skills to persuade.  Persuade investors to give you money, people to quit their jobs for  company that isn’t well funded, business partners to do deals with a company that has a limited track record, journalists to write about the company and customers to pay for products.  If that’s not you and you’re the CEO … think twice about whether you really need a business partner so you can assume the role that you are good at in the company.
  • Bag carriers attend – Another very common mistake is what I call “the bag carrier.”  Last year I sat in a meeting with 3 guys who were building an early stage start-up.  Product was completed but no customers yet.  They point to one guy at the start of the meeting and say he’s our lead technical guy.  He didn’t say a word the entire meeting.  Cheeky guy that I am I finally asked the guy, “why did you come today?”  His response wasn’t that polished, which answered my question of why he did no speaking.  My rule: either practice something for this person to cover and accept that they don’t present well or leave them at home.
  • Part time staff attends -Last tip.  I have been at several meetings where a guy is running biz dev, finance, sales or whatever and during the meeting I ask him whether he’s full time and he responds that he is either: part time, consulting the company or planning to quit his job when the company is funded.  My view is that this person should stay home and not attend the meeting.  If he’s the finance guy and you’re worried about financial questions – don’t.  Study the numbers yourself.  If you can’t master the details of the financial projections ask yourself whether you’re really supposed to be the CEO.  If for some reason you’re convinced that this person must attend for credibility (again, I think it hurts credibility) then please make sure that you proactively point out to the VC that the person isn’t full time.  It hurts your credibility immensely if we only find out because we asked the question.
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11 Responses to Who Should Attend Your VC Pitch?

  1. […] at Both Sides of the Table) Posted Under : General Tags startups entrepreneurship vc funding venture capital pitching […]

  2. Mr nice says:

    You seem like an arrogant elitist.

  3. Kyle Cordes says:

    I think the bias again a staffer who will join full-time once a startup has funding, is unjustified. Rather, I think it is great for a startup to aim high and recruit in-demand people with lots of compelling job options. Such people tend to be quite busy with a paying work, which they will rationally keep doing until the startup can afford to pay at least some salary. Obviously a key team member who won’t go full-time post-funding is another matter entirely.

    (Unqualified opinion warning: so far I’ve bootstrapped two businesses and gone the VC route on zero businesses.)

    • marksuster says:

      Kyle, we’ll have to agree to disagree but I appreciate you putting your opinion forward. Obviously it is a subjective topic. My view is formed from the number of times I’ve seen CEO’s who tell me, “if I only had cash I could recruit a great team” and yet I see other CEO’s who somehow have this magnetism, inspiration and compelling vision that causes people to want to quit their jobs and join forces in order to not miss the opportunity. I think reasonable companies can be built by the former but the truly great companies are built by the latter. Since I’m looking for extra-ordinary returns I’m afraid I have to look for those opportunities.

  4. trevelyan says:

    >> . It isn’t the CEO’s forte and he’s asked me to
    >> handle it.” Wrong. A large part of being a CEO is

    If it really wasn’t the CEO’s forte, he did the right thing sending the guy who succeeded in getting the meeting. Sounds like you were more concerned about issues of face than anything else.

    • marksuster says:

      Unfortunately he didn’t do the right thing. He got the meeting but not the investment. In my opinion the CEO would have been much better off to be on the call and then divide out responsibilities for who talked about which topics. When you’re selling products to clients many CEO’s will say, “My VP Sales is better at selling so I’ll just let him get on a plane to see customers,” but customers always want to see the top dog. The reason is that when you’re dealing with an early stage company you know that success / failure of your project will come down to the leadership of the company. Raising money is no different. Another team member may be more versed in “pitching” but VCs always want to hear from the top dog. That’s just reality – like it or not.

  5. Rajat says:

    to Kyle’s comment, I think you assume that ‘in-demand’ people will only take the highest paying offer. In fact, I’ve found otherwise. The top people are often looking for new , exciting challenges with a much higher upside, and thats the void a startup can fill that a big company simply can’t.

  6. Shane says:

    Mark, you should publish an e-book titled “100 things to not do during fundraising.” I find that knowing what mistakes to avoid is almost more important than knowing precisely what to do.

    Shane

  7. […] Who Should Attend Your VC Pitch? « Both Sides of the Table (tags: startup vc) […]

  8. […] This post was Twitted by willcritchlow […]

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