What are the top three mistakes made when someone tries to raise venture capital? I had a chance to sit in on a blog radio show hosted by Daisy Wright who is a career coach. She had as her guest, Business Consultant & Venture Capital Expert Prerna Chandak of Lemonade Capital.
I asked Prerna what were the top three mistakes she has seen over her career when an entrepreneur is pitching for venture capital. Prerna said the number one error is the entrepreneur has overestimated the value of their business. The third was poor preparation of the business plan and the financials. Guess what was number 2? Poor presentations, lack of preparation and attention to detail.
I really don’t think there is a problem with presentations. I say the problem is with the attitude towards presentations and the low degree of importance placed on them.
For general business presentations, the corporate world is over worked and often the time allotted for the preparation of a presentation is under estimated. However for something as important as raising capital for your business, it boggles my mind how entrepreneurs can blow an opportunity like this simply because they have not put enough emphasis on the most vital aspect of raising money - the show.
Entrepreneurs are a passionate lot and often you can not get them to shut up once they start talking about their company, product or service. This passion forms part of the problem. They tend to wander with their explanations, get too technical, long winded and often very emotional when they present. Passionate is great but it often needs to be controlled.
This is why the preparation of the presentation is so crucial. The VC’s are assessing the entrepreneur as much as the product, idea or service. Is the person a leader? Can they be coached? Can the mange their business?
My suggestions to any entrepreneur is to prepare your presentation early and rehearse until it is a part of you. I suggest 20 minutes in length. As far as content, you can visit Guy Kawasaki’s blog, website or view several videos of his presentations on raising capital. He has seen enough presentations to know what works.
Another good one is David S. Rose’s TED Talk - “10 things to know before you pitch a VC for money. Some great advice in an entertaining presentation.
One tip on getting familiar with your presentation ahead of time is to record your voice as you rehearse the story script. Put that on your MP3 or iPod and listen to it over and over. You will pick out words that you do not say clearly, you will start to visualize yourself in the presentation and you will become very familiar with the flow.
Just one thing to remember as an entrepreneur. Just because you can talk, doesn’t mean you can raise money. Treat your presentation with the highest respect and chances are, if your idea and financial are sound, you may get the money you had been hoping for.
Hang in there, this is going to be a journey.
Tags: Corporate Presentations, Management, Presentation Preparation, presentations, Venture Capital
Tags: Corporate Presentations, Management, Presentation Preparation, presentations, Venture Capital
