Today marked a true milestone in our entrepreneurial journey: our first meeting with a venture capitalist. As the snow fell lightly outside, Nicholas and I waited with terse anticipation at New York's swanky Gramercy Park Hotel. Despite endless weeks of preparation we waited, riddled with questions: what was our VC looking for? What would she want to hear?
Weeks ago I scoured the Internet with mild hope of uncovering what specifically VCs are looking for. Was there a secret formula to a successful pitch? Of course not. But nevertheless I found an article on Entrepreneur.com that truly resonated. The three following ideas stood out then, and were proven accurate by today's meeting:
1. Surround yourself with the best - Considering today's economy, the VC gods are no longer able to simply dip into an endless well of cash. A young entrepreneur may have all the drive in the world, but drive alone doesn't warrant investment. Surround yourself with seasoned professionals in your industry (rather by creating partnerships or by forming a Board). Nicholas and I have been very lucky to work with a partner with fifteen years of consultant experience in our industry. This partner's experience quickly legitimizes and adds value to our project.
2. Consume yourself with the consumer - Today's game is almost entirely consumer-centric. Why does the consumer need this product? Why would a consumer pay for this product? And most importantly, why would a consumer tell other people to buy this product? Not surprisingly, this was one of our VC's first questions to us: "If a consumer had only two minutes at a cocktail party to share with a fellow consumer, how would they convey the value of your product?"
3. Know where every single dollar is going - No matter the size of the pitch, know where every single dollar you are asking a VC for is going. Really, every single dollar. The days of frivolous VC investments are over, and every dollar counts. The financial charts in your business plan are not just for show. Investments will only be made after every proposed dollar spent is scrutinized and justified.
To say the least, Nicholas and I were pleased with our first VC meeting. The development chapter of our journey has closed, and we are embarking on a new chapter of securing the capital necessary to turn our business dreams into reality. If nothing more, the meeting provided us with invaluable insight and helped to shape a clearer picture of the road ahead.
-Caitlin
Weeks ago I scoured the Internet with mild hope of uncovering what specifically VCs are looking for. Was there a secret formula to a successful pitch? Of course not. But nevertheless I found an article on Entrepreneur.com that truly resonated. The three following ideas stood out then, and were proven accurate by today's meeting:
1. Surround yourself with the best - Considering today's economy, the VC gods are no longer able to simply dip into an endless well of cash. A young entrepreneur may have all the drive in the world, but drive alone doesn't warrant investment. Surround yourself with seasoned professionals in your industry (rather by creating partnerships or by forming a Board). Nicholas and I have been very lucky to work with a partner with fifteen years of consultant experience in our industry. This partner's experience quickly legitimizes and adds value to our project.
2. Consume yourself with the consumer - Today's game is almost entirely consumer-centric. Why does the consumer need this product? Why would a consumer pay for this product? And most importantly, why would a consumer tell other people to buy this product? Not surprisingly, this was one of our VC's first questions to us: "If a consumer had only two minutes at a cocktail party to share with a fellow consumer, how would they convey the value of your product?"
3. Know where every single dollar is going - No matter the size of the pitch, know where every single dollar you are asking a VC for is going. Really, every single dollar. The days of frivolous VC investments are over, and every dollar counts. The financial charts in your business plan are not just for show. Investments will only be made after every proposed dollar spent is scrutinized and justified.
To say the least, Nicholas and I were pleased with our first VC meeting. The development chapter of our journey has closed, and we are embarking on a new chapter of securing the capital necessary to turn our business dreams into reality. If nothing more, the meeting provided us with invaluable insight and helped to shape a clearer picture of the road ahead.
-Caitlin
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