I recently filmed a show for This Week in Venture Capital in which I talked about how to prepare for a VC meeting: whom you’ll meet, who should attend from your side, what materials you should bring and how you should run the meeting. I wrote the summary notes in this blog post. That notes only told part of the story.
Bijan Sabet – investor & board member in some small 😉 companies you might have heard of like Twitter, Tumblr, Boxee & OMGPOP – took issue with the whole notion that you even need a Powerpoint deck anymore. Please read his compelling & short post on the topic. The beautiful thing about VC’s who blog is that they tell you their preferences before you pitch to them!
His key quote is,
“there are a couple things in this particular post that don’t work for me personally (every VC is different!).
First, if it’s an early stage company, I don’t need to see a powerpoint deck. I’m comfortable with introductions and then getting into the demo.”
He’s right that increasingly there is a tribe of investors who don’t care to see your Powerpoint deck.
I would argue that this mostly consists of consumer Internet companies (although not exclusively) and it is predominantly early-stage people who are product gurus and have a mildly technical bend to them. In VC there are the obvious people including Bijan, Brad Feld, Fred Wilson, Josh Kopelman and Bryce Roberts. I’m sure there are many more. I would mostly lump me in that category. I’m usually itching to just see what you’ve built. I’m a product geek more than a spreadsheet ninja.
I talked about this in the TWiVC video but I didn’t do a good enough job of writing it up in the summary notes in the post.
And it’s almost universally true that the new band of angels & seed investors are product gurus. Obvious examples include Chris Dixon, Keith Rabois, Aydin Senkut, Dave McClure, Chris Sacca, XG Ventures, Reid Hoffman and so on. If you get the chance to see any of these people (or similar who I’m forgetting right now) you should. The product feedback will be invaluable.
I believe in this so much that, despite my post advising you to be prepared for the *norm* in VC, I wrote a post about a company that came in for a presentation and never even got the slides out or presented a demo. I funded them 8 weeks later. I called the meeting a 10/10 because we had a great 90-minute discussion in which we had great rapport.
So why would I have talked so much about the deck in my post? Isn’t it antithetical to my arguments above? And did I really just try to drop an SAT word into my blog post? No, the ideas aren’t conflicting. Yes, two glasses of Syrah will make you want to use pretentious words that you wouldn’t ordinarily say with a straight face.
The “Triple Play” of VC Presentations
So is the PowerPoint deck passé? Can you just show up without one? Short answer – ‘no.’ You need to be prepared for the “Triple Play.” If you feel comfortable trying the no deck discussion – go for it. If you want to go quickly to the demo – knock yourself out. But take prompts from the VC. Not all of them are driving from product orientation, not all of them are early-stage, not all of them are consumer specialists.
I think the norm in the industry is still to see Powerpoint slides and I wouldn’t hold this against anybody. In reading the comments on Bijan’s blog and having discussed this so many times, I know some entrepreneurs only want to talk with VCs that think that Powerpoint causes leprosy.
The reason I’m more nuanced is that I believe that a well-crafted Powerpoint deck can actually set some context for what you’re about to show the VC. It can orient you like a map so that when you look at product it is framed. And when you finish the demo you can bring in the other important components such as competition, team, customer acquisition strategy, etc. Powerpoint can be especially useful for platform businesses or B2B.
Consumer? Mobile app? Just jump into the demo after intros. Bijan is right.
The best policy is to ask. Something like, “I was thinking about jumping into the demo first before discussing the market. Does that work for you or would you prefer that I start with slides?” And if you prefer a demo and they don’t – don’t be dogmatic. Call an audible. Be ready to map your presentation to their preferred method.
Act I – The Discussion:
I think the negative reaction to Powerpoint from some VCs is that it usually becomes a crutch. Use it as a framework for a dialog not a script. Your goal in the meeting is to establish rapport and have a dialog that is participatory – meaning two-way. It’s why I wrote that the best meetings are debates and not pitches. It’s the same as in any sales-oriented meeting and make no mistake raising money is sales. In Bijan’s post he references Bryce Roberts who recommends getting up and white-boarding. That’s an awesome suggestion. The quote from Bryce is:
“When an entrepreneur steps to the whiteboard the energy in the room totally changes. There’s movement, there’s action, there’s something happening that requires attention. The conversation moves from consuming images on a screen in lean back mode, to active engagement. Half baked ideas get refined, new ideas emerge and a two way dialoge develops where a one way monologue once was.”
Beautifully written. You want the VC speaking. The white board is a great way to make this happen. And he / she wants to hear how you really think, not the presentation you’ve memorized. But if you’re not the worlds best free-formed debater and prefer not to jump up to the white board, you can also do this with well placed and purposeful questions in a Powerpoint deck or demo.
In my opinion you need to establish rapport & credibility with the VC before you try to flip the meeting on them and ask them questions. It’s subtle. But flip you must – just as in a sales meeting.
Use something like, “I noticed you invested in a couple of companies in the x,y,z space. Have you had similar experiences with them? Or has your experience with them proved counter to what our current thinking is?” or some other similar way to engage them in speaking.
Now here is the part that I don’t believe can be taught. You need to be a good judge on whether you feel the VC is engaged with you. Does the conversation flow naturally? Are they asking you questions? Are they actively listening? Do they seem excited to answer the questions you have asked them?
The tell-tale signs that they’re not engaged are: reading through papers in front of them, not asking you questions, no looking you in the eyes or looking at their watch (yes, this happens). But more subtly it’s just an expression on their face that they’re not having fun.
Remember that 90% of all communications are non verbal. You need to pay attention. If you’re not “feeling it” then you need to shift to the slides or demo quickly as a means of trying to engage. If you find yourself in this situation I recommend you politely ask, “would you like me to carry on telling you about the company or would it be helpful if I went through our PowerPoint slides or do you prefer that I start with a demo?”
Very few people ask. I recommend it. Let them guide you.
Act II – The Deck
So your goal is to create a dialog – white board, free form or otherwise – but a large % of VC will prefer that start off with or involve a PowerPoint deck. The majority, I would guess. So on any given day you need to be ready for Act II. The reason for this is that most VC’s still want to get oriented in some way and the established norm for this happens to be the PowerPoint deck covering: What problem are you solving? What does your solution do? How big is the market? Who are your key customers? Competitors? How do you make money? What are you 3 year projections?
Do not be put off by direct questions that are fired at you as you present. Again, 90% of communication is non verbal. If you seem annoyed with the questions or get defensive it will establish negative rapport. View the questions as engagement. Maybe they could have used more tact but at least they’re involved in the discussion. If you’re asked a tough question and you’re not sure if you answered in a way that they expected don’t be afraid to say, “That’s obviously a tough question. I’d love to hear you point of view on X topic. Do you see it a different way?”
Get through Act II as quickly as you can. You really want to get to the demo.
Act III – The Demo
In addition to getting quickly through your slides you also need to be prepared for the VC who wants you to get straight to a product demo. Bjian has made it clear he’s in this camp. I find this is more often an ex operator VC and often somebody who deep down is a product guy, like Bijan. I find myself wanting to get to product demos pretty quickly, too. I get too bored with abstract slides. But admittedly for some topics I like some orientation about the market before I see the product.
If you LEAD with the demo, I’d encourage you to be prepared to weave through all of the key messages that would have been discussed if you were in your PowerPoint slides but get them out as you walk through your demo. DO NOT make it a features & functions presentation. Unfortunately most people do.
“Here’s how you upload a document. Here’s how you add tags. Here’s how you notify a user. Here’s how you vote up / down their content.”
Lame. You’re showing them features, not value. Value is when you frame the demo in terms of why it solves somebody’s true pain point. You know the cliche – it needs to be medicine, not aspirin. I recommend that you make your demo “a day in the life of” your key user persona. Present from the user’s point-of-view.
“Let me show you how a user would do X. In today’s world without our solution they have to enter this information in 3 separate places, which is both time-consuming and leads to errors. Our solution cuts down on both. Let me show you how we would do A, B, C using OurSolution and now let me show you how they do it before OurCo.”
Talk about the customer problem and how you solve it. Talk about the existing solutions, the market opportunity and the competition. Weave all your key messages through the demo. If you can give the equivalent of our PowerPoint slides while conducting the demo that’s the best outcome. I wrote a very specific separate post on how to nail a demo.
Some final thoughts:
– Not everybody is good with impromptu discussions. If you’re not then stick to just the intros and break out your slides. Make sure that in your slides you’re not racing through them but using them as a way to engage in the discussion in a way that puts you more in your comfort zone
– If you’re good with white boards and one exists – go for it. It’s a wonderful way to show how you think, your ability to lead, your raw intelligence to debate and it’s a great way to get others speaking. Not everybody is a natural at this. In my opinion it’s kind of like telling jokes, don’t go for it if it’s not your strength
– On the other hand, if you’re not good at giving demo’s you’re going to have to learn to be. Practice. Get feedback. Find great presenters and have them hear your pitch. Giving great demo’s matters in every part of your business operations. The kiss of death is the CEO who says to me, “I’m not good at demo’s – my product guys never let me do them” (you’d be surprised at how often this gets said). If you’re not intimate with the product it’s hard for me to buy that you’re going to be a successful tech entrepreneur.
Worse yet some people say, “I’m going to set up a follow up meeting to have my sales guy walk you through the product.” Um … no thanks.