Every day I get emails from folks either raising money or telling me about their new idea and asking for feedback. The conventional wisdom is that VCs rarely invest in things that reach them randomly (or “over the transom” in someone’s VC vocabulary – I can’t for the life of me figure out why that phrase hangs around.) However, this isn’t the case for us as 10% of the companies we’ve funded in the past two years were initially from “cold call” email inquiries (Brightleaf and Organic Motion). So – I’m very happy to get a steady stream of random emails – keep them coming!
I’ve noticed a trend toward more video presentations lately. I looked at one this morning and it reminded me of the old writers adage “show don’t tell.” This applies nicely to every pitch you ever do. Specifically, I don’t want to hear you describe what you are going to do, I want to see it. Or – if it’s not built yet, see an example of it. It’s always better to point me at a URL, even if it’s a very rough prototype, as I can usually get a much quicker view of what you are doing by simply playing around.
The video I watched today was a two minute segment of the entrepreneur looking into the camera and describing his business idea. The idea was fine although I could tell within 15 seconds that it wasn’t something we’d invest in given the market he was going after. I ended up watching the full two minute video to see if he ever shifted from “tell” mode to “show” mode. He never did – the two minutes ended and the whole video was the entrepreneur describing his idea.
In my book, this was a wasted opportunity. I could have read one paragraph that contained the same content. The entrepreneur didn’t take advantage of the medium (video) in any way. While he did a nice job on the monologue, he wasn’t trying out for a TV commercial, a TV show, or a movie. He missed the goal – get my attention and hopefully get me to engage to the next level.
For most of the great VCs I know, the way an entrepreneur makes a connection when there is no pre-existing relationship is to generate an immediate interest with the product. That’s what happened for us in the case of Brightleaf and Organic Motion. The entrepreneurs were highly credible, but more importantly we immediately got excited about their products, which caused us to be more interested in going deep and exploring an investment.
This is a repeating theme that for some reason isn’t said strongly enough. The great entrepreneurs (and sales people) “show”. Just think of how Steve Jobs does it. Show me!
The National Venture Capital Association regularly has webcasts aimed at various members of the venture capital community. On January 23rd from 12:00 to 1:00 p.m. Eastern they are having one titled Beyond the Limited Partnership Agreement – Issues For Challenging Times. The description follows:
The current global financial crisis is impacting the venture community in ways that no other economic crisis has. For the first time in our industry’s history, some of the most committed, long term investors in the private equity asset class are reevaluating their commitment, shifting strategy and making the future uncertain. Join us on January 23rd for a provocative discussion as our panel discusses many of the provisions that define the relationship between General Partners and Limited Partner investors, and how these are impacted by challenging economic conditions. In addition, our panel will cover some of the inevitable consequences that may affect the internal operations of the venture firm.
The panelists are:
Howard Rosenblum, Partner, DLA Piper LLP (moderator)
Eric Fitzgerald, Director of Venture Capital Investments, MetLife
Michael Greeley, General Partner, Flybridge Capital Partners
Tom Hodge, COO and General Partner, Frazier Healthcare & Technology Ventures
If you are interested, register directly on the NVCA site to participate.