
How Not to Pitch to a Startup - unfoldedorigami
http://particletree.com/features/how-not-to-pitch-to-a-startup/
======
tonystubblebine
One of the most important things I had to learn when I started my company was
how to quickly get off the phone with people who wanted to waste my time. It
seems trivial, but in an effort to be polite and not burn any bridges, I was
wasting a lot of time. Plus, these sorts of conversations often left me
feeling angry.

So I developed a system. Step one is to be clear with yourself about what
you're looking for. We're not looking for funding and if we do, we will mine
our own network for introductions to VC. We don't do partnerships unless the
partner already has a customer who is asking specifically for us and who is
willing to pay for any integration work. We never work with recruiters and
haven't had any problems finding the people we need.

Step two, is to develop a script.

Here's an example, "I appreciate your call, but we don't work with recruiters
and are happy with our current hiring practices. Pause. Have a nice day.
Pause. Bye. Pause. Click."

If I only say nice things, then that leaves me in a good mood at the end of
the call. My barber just hangs up on people without saying a word. But that
doesn't work for me. Neither does yelling at them.

------
drusenko
Same thing happens to us all the time, really annoying. I've had some
associates have the balls to call us up, not do any research, and then try to
lecture me on how we should be running our business.

Fortunately, I've had a few "hero" associates who have dug down deep into my
social network and found friends that we share, or read quite a few of my blog
posts.

Either way, I've found that these associate calls are a complete waste of
time. It can be hard enough getting taken seriously if you aren't brought in
by the right partner, and getting funded off of an associate or analyst
introduction is very unlikely, despite the fact that each and every one of
them makes it sound like they are ready to cut a fat check on the spot.

~~~
jaspertheghost
There's smart and then there's perspective. VCs are smart, but they're looking
for perspective. They're cold calling you to understand your company and your
space and try to possibly invest in you. In fundamental analysis, they call
this the scuttlebutt approach. From our personal experience, we've even gotten
partners who haven't done their research. The would immediately want to go
into the demo during the pitch. When we meet the occasional partner and
associate who _actually_ knows the space and the product, we are more than
impressed. In reality, if you only vaguely know the space and you're asking
retarded questions about engagement and metrics, you're not really adding
value. We judge VCs by their questions.

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skmurphy
There is another reason why some of these calls may be made: due diligence
before investing in a competitor. This would explain why VC's ask for an
explanation of things that are obvious and available on the website: they are
looking for any unreported changes, and trying to get some nuance by talking
to a founder.

I like the WuFoo folks and have been impressed with their approach and their
application ever since I saw them at the first Office 2.0 conference, but one
thing they may not appreciate is that their business stands as a beacon
pointing at a large and profitable market, and their lack of desire to take
funding means that some other team may be using them as a proof point.
Naturally a VC firm will contact them before making an investment in a
competitor. I am not suggesting that it's every call, but it's likely to be
some of them.

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gabrielroth
If you have a chance to prepare before the calls, they must be prearranged,
right? So why not send a form email that says, 'We're flattered that you'd
consider working with us. We're not looking for funding right now, and we're
really busy improving our product, but if you have any thoughts on what we
could be doing better, send me a short memo at this address, and we'll follow
up. For more information on our company go to wufoo.com/faq.'

From what I understand about VC psychology (all from PG essays and this site,
not personal experience) this would drive them mad with desire. Plus you'd
save a lot of time.

~~~
alain94040
I love this! It will indeed drive some of the VCs nuts. And it's the ultimate
test. Everyone's money is the same. What can you bring to the table beyond a
check? Tell me something smart and I might take your money.

It's the right way for a founder to do due diligence, and it puts the
relationship upside down with VCs. I'd love to be in that position. I got my
share of calls from VC associates, but the real VCs I care about barely give
me more than the time of day.

------
Eliezer
I suspect this is a case of "poor venture capitalists circulate more", like
poor programmers or poor boyfriends. See
<http://www.overcomingbias.com/2007/03/you_are_not_hir.html>

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mkuhn
This article clearly shows the fear VCs have to miss the next big thing.

IMHO thats why they try to collect data on as many companies as possible and
according to the article that happens without much coordination or without a
clear goal. At least from the outside it seems like an effort to only cover
their asses.

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davi
Two paragraphs lead off with the "Now, <statement>" construct:

"Now, our funding situation is that..."

"Now, we understand that..."

I'm starting to get sensitized to this construct. The 'now' is like an 'um' --
i.e., filler -- except, it's an 'um' that says, "I am about to say something
authoritatively."

Obama uses it a lot, too.

I'm starting to flag it as sort of poser-ish.

The content of the article was super high quality, and outweighed this nit.

~~~
gabrielroth
Obama uses it when speaking without a script, right? In that circumstance it's
a kind of time-filler while he arranges his next sentence in his head -- he
often uses a long, drawn-out 'Aaaaand' in the same way. At least it's better
than 'uh,' which is what most people (including me) use.

But in written English it serves no purpose.

~~~
tptacek
It serves the purpose of imparting a conversational style with minimal effort.

~~~
davi
That's right. Now, that being said, it begs the question of whether or not the
style imparted is any good.

~~~
atarashi
If you're going to focus on style, you should use "prompts the question" or
"raises the question."

<http://begthequestion.info/>

~~~
davi
Yes, "begs the question" is misused all the time.

"Now, that being said, it begs the question of <whatever>" -- the sentence was
tongue-in-cheek. I was illustrating, in a mocking way, the style I don't like.

Sorry for the troll.

~~~
atarashi
Now I see. I totally missed that...

------
sonink
Bang on. About time someone took the VC's to task.

~~~
ryanwaggoner
Yeah, no one ever does that :)

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releasedatez
"rare position" indeed but that also means it's a solid business. Congrats!

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bobbyi
This sounds like your fault rather than theirs. You have VCs who are inviting
you to pitch your company to them, you are accepting their offer and then
getting upset that they actually expect you to pitch them.

The point of an intro call is that you tell them what you are up to and they
tell you what their firm is about. If you aren't interested in hearing about
their firm and and you don't want to explain to them what you are up to, then
don't waste their time and yours with the phone call.

~~~
fallentimes
But it's the other way around. This isn't the typical startup hustling for VCs
intros while hoping to get funding.

Wufoo is profitable and growing. And Wufoo is in the very fortunate position
of having VCs sell them on the idea of taking money. So far, the VCs appear to
be doing a piss poor job of it.

~~~
pj
There is an impression among VC's that every startup wants their money. We've
had calls like this too. We tell them we are building sweat equity and they
offer to call next quarter to check on our progress.

I suspect the author of the blog post could do more to change the situation
into one that is mutually beneficial.

Why not just reply to the initial email with a link to a page that has answers
to the common VC questions? Let them fill out their spreadsheets from that.

Unfortunately for Wufoo, they are losing the opportunity to have a productive
conversation by allowing it to repeat itself over and over. If they "know" how
the conversation is going to go, it's their responsibility to move it in a
different direction.

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vaksel
probably an opportunity here, since all of the VCs are asking for the same
exact information, have a website that has the information for multiple
companies in the same place

~~~
teej
That's what CrunchBase (<http://www.crunchbase.com/>) is. The phone call
definitely serves more of a purpose beyond data collection - pitching the
company and verifying legitimacy.

~~~
vaksel
What do you mean by verifying legitimacy?

~~~
teej
Making sure there's actually a company behind the website and not just a
13-year-old kid who's good at FrontPage.

~~~
vaksel
if its a startup that they think is good enough to pitch to, why should they
care?

~~~
teej
Because VCs invest in teams with good ideas not in ideas alone.

~~~
vaksel
yes at the earliest stage, when its just an idea, and nothing more.

But we are talking about something that has already been built. Something that
is already popular enough to catch the eye of VCs. So obviously the team is
good enough, if they arrived at that stage. If they didn't have a good team,
they wouldn't have arrived at that stage to be hounded by VCs.

~~~
mixmax
Not only at the idea stage.

VC's obviously want a team that isn't simply capable of launching a site and
get 10.000 users. They're looking for a team that can make it into a business
that's worth millions.

Not many teams can do this. So yes, people matter, both in the very earliest
stages, mature companies and everything in between. If you don't believe me
look at Apple's stockprice every time there's a story on their CEO's bad
health.

The team that built a site and got 10.000 users may not be capable of driving
it forward to a real large-scale business. Maybe they just got lucky, maybe
they don't really care for the money but just want to have fun, maybe they
have no idea how to manage other people. The team in a companys earliest
stages doesn't say a lot about how well they will perform in the setting of a
larger company, which they will hopefully become.

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edw519
_Because, honestly, it’s so bad out there, that it would probably take very
little to actually impress us even a little bit._

Brilliant! Applies to much more that just VC.

~~~
ken
"When looking at the men of today [...] those who seem like real men [are]
few. Because of this, if one were to make a little effort, he would be able to
take the upper hand quite easily." --Yamamoto Tsunetomo (1659-1719)

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Mistone
what a great blog, nothing will make them lust after you more then swatting
their week attempts back, human nature meets capitalism.

