‘The Perfect Pitch – How To Attract Money For Your Digitally Convergent Business ’
Pitching to investors of both the angel and VC vairety was the topic up for discussion at this session on Monday 13th March 2006, with a raft of investors, advisors and recipients of funding sharing their experiences and recommendations…
Alex Cavalli – Chairman of the Digital Convergence Initiative
Ashwani Dahr – Venro / Iconixx (bridging early-stage to later-stage funding)
Josh Baer – Skylist
Harlan Beverley – Bigfoot Networks (fight lag in video games)
Sachi Gahan – VC, CentrePoint Ventures
Peter Huff – Blue Sage Capital (do more later-stage funding)
Q: What’s the single hardest thing in developing a pitch?
Harlan Beverly stressed knowing what you want – always go into a meeting with an ideal outcome and if you don’t sign the cheque today, have a thought prepared on what else would be nice.
Josh Baer said a lot of the best business plans that he’s seen have pulled together the market information and presented why their idea will make a success in this scenario.
Sachi Gahan listed (1) People (2) Technology (3) Market – different VCs will judge with different emphasis the order of importance of these. He was sceptical of Gartner and Forrester’s background information (which comes with a price-tag). So it’s great if you have these numbers but he was more interested in the bottom-up set-up and perspective as it shows the intelligence and analytic abilities of the entrepreneur.
What are your key strengths?
Beverly reckoned that the people aren’t so important but Gahan countered that the management team are important.
From Ash Dahr’s point of view, the people and management’s perspectives are paramount but the filter of the experienced entrepreneur has to be there, so it’s harder for the first time entrepreneur.
Angels have lower return expectations but VCs bring a discipline and rigour that makes a real difference.
Baer said the management team is the most common core requirement. Speaking as an angel he said it was very important for them. Also, they were most concerned with the customers – who are they, how are you going to get through to them, and do you understand them?
More than management and moneybags…
A delegate asked the question: as a technologist with a business plan but no management team, would any of the panel see him?
Beverly said that they see a lot of such plans. Dahr replied that as a technologist you need to know who you’re talking to regardless, then they quickly filter. So make sure you know who you’re talking to and how much money you need.
More than one person voiced frustration and disdain at funders’ attitudes, with several saying they’d been turned down once or more for funding but managed to bootstrap quite sufficiently and sometimes with great success.
An angel investor in the audience quipped “it’s a bit like the bank, they love to give you money when you don’t need it.”
Others asked about the bootstrapping approach specifically, but they were steered to the session on ‘Bootstrapping Your Digitally Convergent Business’ directly afterwards at 5pm, where this would be the primary focus of discussion.
Filling in the blanks
Gahan added that they will always ask for a full reference list and do due diligence on the names you didn’t give and reference; so integrity is a deal breaker.
[This panel was part of the SXSW Interactive ‘Digital Convergence Initiative’ strand, which ran multiple panels and a few evening parties throughout the festival-cum-conference. The DCI is a project of the greater Austin-San Antonio Corridor Council – the Texas Technology Corridor]
See the motherlode complete list of SXSW Interactive 2006 panels.