Entrepreneurs at Springboard Enterprises' boot camps learn pretty fast that making a verbal pitch to investors is very different from submitting a written business plan. A good pitch puts the basic plan to music (through anecdotes, props, slides) and arranges the music in a way that is pleasing to investors' ears. If you think you have the right stuff, you may want to apply directly to Springboard or another venture-capital forum. If your pitch needs work, here are seven good practices gleaned from Springboard's most recent New England boot camp, held at Babson College, in Wellesley, Mass.
1. Write every single word for investors. So says Andrea Silbert, cofounder of Springboard and CEO of the Boston-based Center for Women & Enterprise. "You want to answer their questions, not push your information on them," she says. VCs ask the same basic questions: What's the opportunity? How will you be profitable? How can I as an investor get some of those profits? Silbert says she's seen too many presentations in which product details take center stage and everything else "is crammed into a couple of slides."
2. Make yourself familiar. Elizabeth Riley, an adjunct professor at Babson's Arthur M. Blank Center for Entrepreneurship, advises that you put yourself in one of the categories VCs have invested in, such as "faster/better/cheaper." Don't tout a "unique" product -- "unique" is associated with "small" and having a product rather than a business, she says. Above all else, VCs want to see proof of the concept. "It's good if people need it -- and even better if customers couldn't live without it," Riley says. In other words, don't just spell out the product benefits. "Put a dollar amount on the pain or savings to the customer," says Kim Marinucci, a speech coach for Winning Pitch.
3. Think bigger, much bigger. Don't think that VCs have lowered their expectations just because of the dot-com debacle. Today they want to see companies with an "addressable" market of $1 billion or more. You need to provide a three-year forecast and to detail your assumptions about unit sales and the customers required to get there. And you need to support all of that with facts. "Before it was about telling the story," says Amy Millman, president of Springboard. "Now it's about telling the financial story."
4. Play up your experience even if you're not the CEO. If you're the one speaking, you're the most important person on the management team at that moment. The investors are listening to you. So don't forget to talk about the accomplishments that demonstrate your value. (At the first Springboard boot camps a few years ago, women entrepreneurs often failed to mention themselves at all, Millman says, but they had no problem talking about the rest of the management team.)
5. Justify every penny you want to raise. The details show that you're a good manager. What exactly do you want to do with the money? "When you're really granular, VCs are more likely to give you more money," says Nelson Stacks, a venture capitalist at international VC firm 3i Capital. "The more granular you are with what you need for each milestone, the better you'll do," he adds. By the way, don't try to say what you think your new round of financing will be valued at -- that's not appropriate in a 10-minute presentation.
6. Tell investors whom you'd like to hire and why, and put a price tag on the talent. It's OK that you don't have a full management team today. "VCs want to help pick people who are going to make money for them," says Experience.com's Jennifer Floren, a successful Springboard alum who has raised millions in VC funding for her online recruiting company. She says that when her company was a spanking new start-up with no customers, VCs invested in her management team's ability to execute.
7. Think about multiple exit strategies. Since an initial public offering isn't likely, you need to find competitors with comparable numbers for the purpose of a sale. "Figure out who would acquire you," says Andrea Teichman, a member of Hill & Barlow's technology and emerging companies practice group and venture capital and private equity practice group.
Susan Greco (firstname.lastname@example.org) is a senior writer at Inc and coauthor of a new book, Customer Chemistry, How to Keep the Customers You Want -- and Say "Good-bye" to the Ones You Don't (McGraw-Hill, 2002).