David S. Rose on pitching to Venture Capitalists

http://www.ted.com/talks/david_s_rose_on_pitching_to_vcs.html

Continuing the topic of starting up which we started learning in 'The language of small business' I decided to write a short reviw about raising up money via venture capital.

David S. Rose's rapid-fire TED U talk on pitching to a venture capitalist tells us the 10 things we need to know about ourselves -- and prove to a venture capitalist (hereinafter VC) -- before we fire up our slideshow.

From the first minute, Mr. Rose grabs our attention: "I am a serial entrepreneur-turned-serial investor. By the use of pitching Power Point to VCs, I have personally raised tens millions of dollars from VCs through Power Point pitches. Then, turning to the other side of equation, I personally have supervised the investment of tens of millions of dollars into companies who have been pitching me Power Point Presentations." That is another reason for analyzing this video: it's very interesting to take an advice from the person who has seen the both sides of the coin, beeing both entrepreneur and VC.

David S. Rose claims that the single most important thing that VC is looking for when we come to them pitching our business idea are people. Therefore the entire purpose of a VC pitch is to convince that we are the proper entrepreneurs in whom they are going to invest their money and make a lot of profit in return.

How do we manage to do this?

According to Mr. Rose, in the course of our VC pitch, we have a very few minutes - most angel pitches about 15 minutes - to convey a whole bunch of different characteristics.
The most important of these characteristics is integrity. David Rose himself would much rather invest in somebody who he knows is straight than somebody where there is any possible question.
The same important as integrity is passion. If we are not passionate about our own company, why on Earth should anybody else be passionate and why should they put money into your company if  they are not passionate about it?
Besides integrity and passion there is a whole panoply of other things we have to do to wrap up in this package that we are presenting to a VC.
Experience
We should be able to say, "You know, I have done this before." And "done this before" is starting enterprise from scratch, creating value and taking something from its beginning to the end. VCs love to fund serial entrepreneurs.
Knowledge
If we are trying to convince VCs that we are going to be the great developers of the map of the human genome, we definetely had better know what a human genome is. We also have to carry out domain expertise.
Skills
We should also have the skills that it takes to get a company going. Those skills include everything from technical skills, if it is a technology business, to marketing and sales and management and so on.
Leadership
We have to be able to convince VCs that we either have a developed team that has all those factors in or in the other case we have the charisma and the management style and the ability to get people to follow our lead, to inspire, to motivate them to be part of our team.
Commitment
As a VC, Mr. Rose emphasises that he should know enterpreneurs have commitment, that they are going to be here to the end.  VCs don't want anybody who is going to cut and run at the first opportunity.
Vision
If we want to make the requirements of the VCs we should have vision to be able to see clearly where this is going. Being a VC, David Rose, doesn't want another "me-too" product. He wants somebody who can change the world out there.
Realism
While the change in the world is great, it doesn't always happen. That's why we are ought to have rational projects.
Coachability
Finally, VCs need to know that we have the ability to listen. People, who are VCs and angels, investing in our project, have had hands-on experience and they would like to know that we want to hear that experience.

How to convey all those things in 10 minutes?

David Rose reccommends to think about your pitch as a timeline. We walk in the door. The first thing we should do - start like a rocket. We have between 10 and 30 seconds to get the attention of the VCs. A story or your experience could be helpful here.
You should grab their emotional attention focused on you within that first few seconds. Then, from there, you have to take them on a very solid, steady, upward path. Right form the beginning to the end. While presenting our project we ought to get better, and better, and better, and better and at the very end we've got to "boom", to pull them in and knock them out of the park.

It took me 6 times to watch this video to understand the main ideas, outline key points and write them down because David's speech is really very fast (probably because it is very emotional).