Recently I asked seven long time Venture Capitalist and founders of successful startups from Silicon Valley and San Francisco area whom I am friends with, “What advice would you give people who are not from Silicon Valley, but are traveling to Silicon Valley / San Francisco Bay Area to pitch to VCs?”
The question was sparked after watching some episodes of Bravo’s Startup Silicon Valley where they glorified Silicon Valley startups and obtaining VC funding. I could not resist watching a few episodes because I wanted to see how Hollywood would portray Silicon Valley startup life, since I understood startups and the various way of funding them.
The show, produced by Randi Zuckerberg the sister of Mark Zuckerberg who founded Facebook, made me predict a new breed of young kids with big dreams, moving to Silicon Valley with little idea of what it truly takes to get a startup off the ground or the drawbacks of seeking venture capital funding.
However, I founded this site not to burst the bubble of enthusiastic entrepreneurs nut to educate them on the fundamentals of having successful startups. Coming ill-prepared to pitch VCs not only wastes your time but the VC’s time as well.
Below is the answers I received from the VCs and founders. Out of respect to their privacy we have not published their names.
What advice would you give people who are not from Silicon Valley, but are traveling to Silicon Valley / San Francisco Bay Area to pitch to Vcs?
“Get introductions first before cold contacting VCs. If you don’t have a stein industry reputation known to your investors, then make sure the business has traction or very strong IP.”
“Be ready for tough questions. Prepare the 5 Whys.”
The 5 Whys is a powerful tool for engineers or technically-savvy individuals to help get to the true causes of problems and used in business to see how much value an idea has and what is the best way to address it.
“Make your first visit NOT planning on pitching. Make your visit when you do not need money, and make appointments to get advice. Make a follow-up appointment for 6 months later to those that gave you good advice and see if the relationship develops.”
“Unless you have a start-up that requires a great deal of capital to get the business off the ground right from the start, stay home and go to the internet instead and use all the available services there including crowd funding. Crowd funding is a great way to test your product or service in the first place to see if there is any market interest. If there is then you’ll get funding right there, and then it is just about promoting it online through social media. The renaissance of the innovator that is occurring today is cutting out the middlemen between the entrepreneur innovator and the market. Now we have all the technology we need online to replace all those middlemen. Because of this, products and services are only becoming cheaper and more accessible to the broader global market. You can sell your stuff through Amazon, eBay, Google and tons of other sites. I haven’t looked, but I bet you can go to a one stop shop and get all the services you need for your business. Although I recommend doing the legwork yourself and find the services that best fit your business. The war cry is; “Start selling yesterday!” You can go make a prototype and demonstrate it in 3-5 minute video and put it up on Kickstarter and see if there is any interest before you go do anything else. That’s how easy it is now! So go be disruptive innovator entrepreneurs!”
“1. Secure a local address, 2. Secure a local partnership, 3. Demonstrate skin in the game, 4. Demonstrate proofs of concept.”
“If you are truly engaged in your venture and your field, you will have friends and peers who will have pitched successfully to VC in Silicon Valley. Who are your potential customers? Your suppliers? Your complimentors? Search and find them and get their personal advice. If you know them, you will get a much better, personalized set of advice than you will from a general top ten list of suggestions.
You might even be so bold as to ask the VC you are pitching to who has given them a great pitch recently and ask for an introduction so you get make the best of your pitch time.”
“If you can do it, try the teleconference route and sound out your plan with the investment associates (not partners) at one or two VC firms. Once you are confident that there will be a good reception, make the trip – till then, keep improving your value proposition. “