Whiplash from Pitching VCs

In the second half of 2009 we pitched Pardot to 29 different VCs. Over the course of four months we met with a number of VCs in Atlanta and flew to Silicon Valley twice, Boston once, and Washington D.C. once. Pitching VCs is great in that you get a chance to engage with really smart people, share the vision, and hear feedback.

Only, the feedback is driven by their view of the world and personal experiences. After the 15th conversation whiplash starts to set in from all the different recommended actions — target this market, make this pricing change, think bigger, etc. Ideas get tossed around at a rapid clip, and as an eager entrepreneur seeking capital, the instinct is to look on fondly and nod ‘yes’ to each suggestion.

When going into conversations with VCs, have a clear opinion and vision (no different than talking with customers and prospects), so that any suggestions can be put against the plan with a clear head. More ideas and recommendations will stress test the vision, which is fine, but try not to get caught up in the whiplash of different recommendations. Make improvements as necessary and carry on.

What else? What are some other thoughts on the whiplash from pitching VCs?

3 thoughts on “Whiplash from Pitching VCs

  1. Great post. Based on my experience with road trips and lots of investor meetings, my thought is this: listen for the recurring themes and figure out how those recurring themes can be integrated into your strategy. If you hear the same message from enough smart guys in enough different settings, it’s probably a good idea.

  2. I had this experience pitching VCs also. Sometimes potential investors gave great advice that I put into practice in the business, but often they offered opinions that were not very useful. The most useful advice came from people who had relevant experience or significant domain knowledge.

  3. The challenge when pitching multiple VC’s is magnified by VC self interest. Most VC’s have a set of investments already in place, are looking at their entire portfolio in relation to where your start up might/might not fit, have a finite investment window and are trained to say NO, rather than Yes to most opportunities they see.

    Start-ups need to have a clear idea of what each VC’s portfolio looks like, what their investment pattern/history tells them and then decide whether or not it is worth pitching a particular VC. Assuming the VC you’re after is a fit, then all recommendations during your pitch, should be taken with a grain of salt. My litmus test for Start-ups I have prepared for VC funding, during a pitch session looks like this:

    Start up: “If I understand you correctly we need to make the following changes… X,Y,Z and then we should be ready for the market and investment. Is that correct?”

    VC: “Yes, those are the changes we recommend.”

    Start-up: “Great, if we make those changes and come back to you, then I can count on your investment in my company, correct?”

    VC: …………

    Advice is easy to give. If a VC really thinks your start up will work and their recommendations will make you investment ready then this is a way to ensure their buy in. If they start waffling, then their recommendations aren’t worth much or they aren’t a good fit (which could be a host of reasons) & again think twice about whether their recommendations are worth changing your company for. I wrote two articles awhile back about this dance. The top ten lies Venture Capitalists tell Entrepreneurs and the top ten lies Entrepreneurs tell Venture Capitalists. It’s all about understanding the “funding dance” and making sure your investor and your start up vision is properly aligned.

    Another good article David. Thanks!

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