VC in DC

The Effective VC Pitch and the Magic of 3

I coach CEO's who are seeking venture capital to deliver their pitch in the following way.

Tell the complete story in 3 minutes.

Tell it again, with the next layer of detail, in 10 minutes.

Repeat the story a third time, with greater detail, in 35 minutes.

Having told the story three times with increasing levels of detail, stop talking.  Ask for questions, comments and insights.   This approach provides assurance that the small audience understands the pitch and company story.   It also provides an expeditious and efficient starting point for the group to consider and discuss an opportunity. 

It shouldn't be surprising to entrepreneurs that the discussions about an opportunity by venture capitalists after a pitch often revolve around what was said and what was meant in the preceeding meeting.   "I thought he meant that they would rely more on OEM sales than direct", for example, while someone else argues the opposite impression.   

The 3X approach described here eliminates a lot of those misunderstandings.  It also provides the CEO with the assurance that a turn down by the VC, if one occurs, is because of a honest disagreement rather than a simple mis-understanding.

Channel Strategy

Image via Wikipedia

The late Katherine Hepburn said that there are two appropriate ways to acquire firewood; "you should cut it yourself or steal it, never buy firewood".   As someone who spent the first 15 years of my career in channel development and am often asked about channel strategy, I agree with Katherine completely.  You can build your own channel or you can subvert someone else's, but you can't buy a distribution channel. 

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