Perspective, Pontification and Propoganda about Entrepreneurship and Venture Capital, brought to you by David Hornik of August Capital.

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Russ

Hmm... I'm reading this weblog with incredible interest, but this struck me as a bit odd. Is there something I'm missing, or does this post translate to: "Make sure you are able to stroke your potential investors egos by knowing their past accomplishments in detail." Seriously? Someone was giving a pitch, yet unaware of the VC's specific experience and that ruffled some feathers?

Wow. That doesn't sound right. Are you interested in dynamic people and ideas or sycophants? (Or a little of both?) Is this just the reality of doing business?

-Russ

hornik

By no means was I suggesting that the reason to research the background of the person to whom you are pitching is to suck up. That will probably hurt more than it will help (unless you're really good at it). The bigger issue is that investors have different backgrounds, different interests, different pre-conceptions. If you take the time to read about them ahead of time, you will be able to better pitch your idea. For example, I have seen dozens of digital music pitches. And those folks pitching digital music to me have been well served to do a little reading up. They will learn that I have a degree in Computer Music, so they can pitch things like digital watermarking at a deeper level. They will learn that when I was an attorney I represented Mongo Music (which was sold to Microsoft) and Sonique (which was sold to Lycos), so I have experienced the business models around digital radio and player technology for good and for bad. They will learn that Dave Marquardt, the founder of August, was the only private investor in Microsoft and still sits on the Microsoft board, so if they are pitching a Digital Rights Management technology, they will need to understand how it competes with or is complementary to the Microsoft strategy (although you'd probably have to answer that question in any pitch). They will learn that August invested in Listen.com, so we have had a lot of experience in the content delivery and negotiating with the record labels, so that will likely color the way we look at digital music opportunities. All this stuff is helpful, albeit not determinative, when pitching. Sales people understand this intuitively. Before you go to sell, know everything you can about the person with whom you're talking. Well pitching a company is no different. And the more informed you are (about your space, about your product, about the folks you are pitching) the smarter you will appear.

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