4/23/2008

Rich Guy Startup Pitch Rules

This advice is especially useful for Silicon Valley entrepreneurs who need to know how to pitch New York investors.
I've enjoyed Harry Newton of In Search of the Perfect Investment columns for years. He is most famous as the author of Newton's Telecom Dictionary. When I was writing telecom manuals in the 90's and needed to master it's arcane language, dense operations theory, and complex technology, I was always able to depend on this very detailed and funny book. Trust me...a guy who can find humor in telecom and make money explaining it to mortals is worth listening to about how to pitch your start up.
But Harry is also a technology-savvy guy who understands the nexus between technology and investing. According to the posts on his website, he's a very successful and wealthy guy who , in searching for the perfect investment, speaks to many social media, Web 2.0 and technology entrepreneurs who pitch him in hopes that he will invest in their ideas and products.
Here are Harry Newton's rules and valuable insights for how to win him (and other big money men and women you will need to get your start up from concept to reality) over.
Trying to sell me on your new start-up? I want to invest in your start-up. I want your start-up to be the next Google. I like being pitched. Lately I've seen a lot of start-ups. But there's many of you out there without a clue. Here are some "Rules."
1. Tell me how we're going to make money. Internet businesses are cheap to start and run. I know that. But when we have a million free users, who love us, how are we going to get them to give a few shekels for our hard work? Don't tell they'll be "class-act" (i.e. rich) people whom Mercedes and Lexus will be salivating to advertise to.
2. Tell me you put some decent money in.. I'm not impressed with someone aged 35 putting in only $100,000 and telling me he can't afford any more, since the last entrepreneurial venture was a bust. Not taking a salary for two years is also stupid, unless you like have kids with bloated bellies. There's nothing wrong with starting a business with nothing (I did). Just don't ask me to invest mega-bucks into something you haven't.
3. Don't expect to sell me on one visit. I'm not a "slam-bang, thank you mam" kind of guy. I like to actually to get to know you and develop a relationship. So don't get pissed because I said "Maybe." Maybe I'll say Yes the second or third time I see you.
4.. Listen. I'm know I'm no genius. But if you dismiss everything I say, I'll start to worry. Heck, I've been around for a lot longer than you. Your competitor was in pitching me last week.
5. If I don't understand your product, we got a problem. Actually, I should understand it and I should get excited by it. Maybe I'll even want one. Think about that. If cheapskate me is willing to pay you real money, you must have something good.
6. Send a thank you. If I spend my ultra-valuable, ultra-precious time meeting with you and hearing your pitch, at least send me a "Thank you" email. A handwritten one is even better. Remember, I'd rather be playing tennis than listening to you.
7. Make sure you pass my sneaky little tests. Maybe I'll ask you to send me some industry stats? Maybe I'll ask for your competitors? Be wary. I'm always checking on to see if you do what you promise. If you let me down, you'll let your poor customers down, too.

8. Don't overvalue your venture. No start up should have a market cap of $10 million unless you have the patent to eternal life and then you don't need me, except as a customer.
9. Stop checking your BlackBerry when we're meeting. Either we're having a conversation, or, you're checking your email. But you can't do both. It's offensive.
Give this list to your kid or grand kid who's trying to make the next Google. Tell him he can. I know he or she can. But it ain't easy. Most start ups fail.

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