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Start-Up Rule #2: When Pitching, Bring Your Guy

The second entry (first is here) in what I hope is a continuing series....

You know how when you go to a foreign country, where English is not the native language, how general living becomes simultaneously adventurous and uneasy. This is especially true when you go to buy something. Usually the store owner speaks “some” English, so you can get through the transaction, but you end up getting less information than you would at home. The result of this is that often times you feel like you got ripped off. This is because often times you have been ripped off.

Now same situation, but this time your old college roommate happens to live in the country your visiting. He’s not a native, but he speaks the language fluently and knows the area well. When he comes with you into the store, he brokers the transaction – i.e. he does the talking. When you walk out of the store this time, you feel just like you did at home. Much better.

What’s this have to do with start-ups? This is exactly the dynamic of the funding process. Think of the conference room at the VC’s office as the store in the foreign country. There are people in their selling stuff (money). You are not fluent in the language they speak. You are not a native. You do not know the local customs. Be smart, bring your local guy to broker the deal.

Not sure this is a good idea? Well, look at the other side of the table. VC’s ALWAYS bring their guy. The VC knows that he or she doesn’t speak the same language as you. You’re a coder, an operator, not an investor. You speak in cryptic terms that they’ve heard of, but aren’t really sure about. But they want what your selling, maybe. So they bring their guy every time to broker the deal.

If you’re wondering who is who in the meeting, the VC’s guy is the one who has some experience in your area, is somewhat fluent in your language and asks you a lot of questions about your actual business. This opposed to questions about cap table, burn rate, etc. – the VC’s ask those things. They call this whole process due diligence, but this is just a fancy term for bringing your guy.

So who’s your guy? Could be lots of folks – a lawyer you retain, a business partner who’s been through the funding process before, an advisor who does this type of thing for a living. Could be anyone. But bring him. Don’t wait for the term sheet. Lots is said (implicitly or explicitly) in these meetings that will be used against you later in the process. One of your guy’s main jobs is to make sure this doesn’t happen.

But wait you say – I know start-ups. I worked for one. I know about venture capital. I don’t need to bring anyone. Uh huh. You also had three years of high school French. Let me know how things worked out when you bought that vase at the antique shop in Paris…

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Comments (2)

I can certainly agree with the sentiment. I'm just not sure where the data lies on this one.

Is one style of pitch more successful in bottom line numbers? Does one get the deal done more often? More money? Better valuation?

IMHO, there are a host of other variables that can easily mitigate the potential pros or cons of bringing someone to the pitch with you. That said, I agree that its a great idea worth investigating and deciding for yourself if you would benefit from a paired pitch style.

Should Steve bring Woz up with him for his keynotes? LOL

Blair:

Couldn't be more right, a tactic perfected by Jerry when he brought George along to prevent Puddy from charging for the undercoating, great post Mike.....HIGH FIVE!!!

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This page contains a single entry from the blog posted on April 23, 2008 2:36 PM.

The previous post in this blog was 7 People You Hope You Don't Meet At Your Start-Up.

The next post in this blog is Not Switching to Guns, Goose.

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