Posted by Entrepreneer on 2008-04-14
I had the opportunity to sit in on someone else's pitch to a VC recently, and for the first time got a chance to see a pitch meeting from the investor's point of view. It was illuminating. I turned back to the various pitches I had made in the past, and saw them in a new light. When you're embedded in, and heavily personally devoted to an idea for a long time, it's hard to have any perspective. When you're hearing an idea for the first time, you'll probably see some gaping holes immediately. The entrepreneurs who are trying at the idea are willfully blind to these holes, having spent months (or years) justifying their hopes. There is one hole that I perceive is routinely there, and you'd better be ready to answer this question: "Why you""
As an engineer, I have been routinely approached by people with business ideas, who need an engineering lead to get the idea off the ground. They usually also need a designer (product and visual), and maybe a sales person. Which causes me to ask them, "I have my own ideas, and I can go build them. What the hell do I need you for"" In the end, if you cannot write code, write a detailed product spec, draw graphics, draw up contracts, or raise money, what good are you" We could come up with 5 decent ideas a day, so even at a good consulting rate, that's what, $240 per idea" For something to be investable, you need both the idea and the capacity to execute. If you're a dreamer with an idea and nothing built, please don't talk to VCs. You're wasting everyone's time. Go find an angel investor who will help you put together a demonstration of the idea.
Beyond that, even if you bring a team that's capable of executing, you still face a real problem. You aren't the only person working on this idea. Trust me, if you are the only one working on it, the idea is too early. So if there are other people working on it, why are you likely to be one of the winners" Do you have plenty of contacts in the industry" Do you have a deep personal understanding of the problem space" If you're a male 20-something building a Mom's portal, you gotta ask yourself what the hell you're doing. Remember, for every idea a VC invests in, they probably turned down 99 others. What will make you stand out" How will you answer when they ask, "why you""PRIVATE: Members Only