An investor pitch meeting is similar to a blind date, argues
, an investor, president of ooVoo, and a renowned digital innovator
who pioneered CD-ROM technology and LaserDisc distribution. In most
cases you quickly realize if you're going to spend the rest of your
days with the person sitting next to you, he added.
event in New York this week, Samit and his colleagues discussed
what entrepreneurs should realize before scheduling a "blind date"
with an investor in order to make it successful.
Samit shared the stage with angel investor
, chairman of NY Angels, and venture capitalist
, chairman and CEO of Revolution LLC and co-founder of
The troika -- seen in this photo with moderator Vanessa O'Connell,
entrepreneurship editor at the
Wall Street Journal
-- gave a bunch of useful advice to the entrepreneurs in an very
tightly-packed room. Here are some highlights:
Be well-prepared with your pitch.
No, that doesn't mean putting together an endless PowerPoint
presentation. Add some personality and charisma to your pitch; open
up, set up a personal connection, even "be funny," as Cohen
suggests. Know your project, and even more importantly, your
customer. What's the customer acquisition cost? Why are your
customers using your product? Be prepared to have your prospective
investor call your customers, but not before they interrogate you
about who your clients are and why they like your product.
Aim to spark the investor's interest in the first 10 to 15
The panel unanimously consented that in most cases it takes a
half-minute or less for the investor to say "No," at least
Don't be afraid of the word "No."
That's the next best word you want to hear, emphasizes Cohen. "Get
to 'No' as fast as you can," he recommends. To save time, both
sides should be direct and up front about their intentions and
Take time to research your investors
. Get to know their sphere of interests, focuses, and
personalities. You have to be on the same wavelength -- when you
get funding, it's highly likely that you'll be spending more time
with your investors than with your family or a significant other.
Ask investors about their investing strategies, their passions, why
they are investing, and if they believe in you. Be responsive to
criticism. Be ready to listen and hear. And it's vital to be
"coachable," as Cohen puts it.
Don't over- or underestimate the importance of the great
Case says he tends to invest more in ideas than in people, but
admits that the biggest challenge is the execution. Given that
creating a startup nowadays is not technically difficult, you'd
better have something up and working when you pitch to an investor.
(Keep in mind Edison's famous quote: "Vision without execution is
That said, an AAA+ idea that is not yet executed might be given a
It's critical to find the right investor, your perfect
If someone turns you down, it could mean just about anything --
maybe he or she is just not comfortable with your market segment,
for example. The investing company Digital Sky Technologies, for
example, prefers late-stage high-growth global Internet companies
and thus invested in
) once each company was well-established and almost ready for an
Some investors are following the trends and invest enthusiastically
in big data companies, or Near Field Communication (NFC) startups,
or anything else they feel is trending at the moment. Others have a
broader outlook. There are dozens of focused investors out there,
and even the person who turns you down would likely recommend other
- and better - doors to knock on.
Friends and family should be investing
. Money is as important to the business as the belief in what
you're doing, and so it follows that those who believe in your
project ought to be willing to invest. Investors see it as a good
sign when friends or relatives back your project before the first
outside investor comes into play.
The importance of teamwork cannot be
As Case says, "If you want to go fast, go alone, but if you want to
go far, you'll need a company." Cohen says that he pays special
attention to the team component in the startups he's evaluating.
"They basically should be able to finish each other sentences," he
Due diligence: Do it yourself and don't be intimidated when
your prospective investor is doing it.
Cohen is certain that exercising good due diligence is beneficial
to the young company.
ALWAYS (yes, capitals intentional) mind the
Do thorough research and be up front with the investor about your
findings. If you say "We have no competitors," you will immediately
raise a couple of red flags to the investor. You need to know the
context of the market you're entering and be ready to point out why
you are better than the competition.
Yes, you've heard it a million times, but failure is
Don't freak out if you fail. Samit says that he prefers to invest
in companies that have already failed, and Cohen loves "successful
failures." The ability to quickly fail in a business that is going
down is essential. It's easy to say and hard to do, but embrace the
failure and learn from it, turn it into a positive experience.
Cohen believes that the real failure occurs "when you stop trying."
To conclude, here's the truism Samit reiterated:
From his experience, founders who appear most focused on earning a
lot of money rarely succeed. Instead, the goal should be, "I'm
going to change the world. " Approach investors with a deep passion
coming from your soul.