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

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Con Tendem

I guess you guys do not view Powerpoint as inherently evil then :)

A question if I may. If you are considering an idea that is at least partly outside the core competence and industry expertise of your group, will you invite a domain expert to sit in on such a presentation? In a similar vein, what happens if you ask a really hard question that is inentionally somewhat out of left field and the presenter does not have a good answer. Is that the end of his/her pitch? Is there some slack given to really hard and unexpected questions?

Andy Ruff

To carry Tendem's question a bit further...are there any subtle but evident signs that often cue the pitcher is simply BSing an answer such as those you may get from incredibly creative/challenging questions (particularly if the pitcher attempts to hide behind a layer of tech or abstract ideas)?

John Doe

Isn't that sort of focus on presentation a bit extreme? That is to say, the entreprenuer only has 18 hours in the day or so, shouldn't they be focused on something other than being able to leap about in powerpoint? I know that I tend to change presentations regularly, and leaping to a particular slide is a challenge, because I don't know what slide it would be.

Jason Lemkin

The best way to nail a prez with sharp VCs like Mr. Hornik is to have already done the prez 20 times first before you meet with him. All the questions end up being the same by that point, so you'll have it nailed. Do a few dry runs with friends who are CEOs, angel VCs, corporate attorneys, etc. first. That will suss out 80% of the typical questions that may not have already occurred to you. Then, the first 2 VC meetings you have will suss out the next 10% (expect you may bomb out in these first 1-2 VC meetings, so pick VCs you are comfortable bombing out in front of). Then, by the time you get to David, you can nod your head when he asks question X, tell him that's "a very good point", and segue straight into a blanaced and thoughtful answer to his questions.

Jake

I'm intrigued by the fact that you're so enamored with the quality of the presenter. It would seem to me that that is a superficial quality to focus on, but I'm sure it makes the day-in, day-out aspects of listening to pitches more comfortable for you. Do you ever engage in internal dialogue about superficial biases infecting your investment decision-making process?

Hornik

f a VC presentation had only to do with style, you would be absolutely correct. VCs who focus on superficial things make superficial investments and ultimately lose money. My sense, however, is that an entrepreneur's ability to present well is predictive of a lot of important things for a startup. For one, it will likely be necessary to raise more money in the future and the ability to clearly present your business proposition is critical in the fundraising process. It will also be important to have a succinct story for customers, analysts, etc. Moreover, the ability to present your company well often turns on your ability to be flexible and respond to those things of greatest interest to your audience -- and that, in turn, will depend a great deal upon the degree to which you are familiar with critical matters like competition, market, technology, etc. So, at least to my mind, a bad presentation is indicative of much more than an entrepreneur's ability to present. It is indicative of an entrepreneur's ability to market, sell, raise money, motivate employees, motivate the Street, etc.

Jake

David,

I would even go farther and state that in start-ups the CEO is often intimately involved in the sales process. And selling can include potential partners that will help the company achieve strategic, business and operational goals as well as traditional customers. Many times the messages used in these situations are very similar to the messages provided to VCs. Ergo, a CEO who can pitch his company well to VCs will also be successful pitching his company in a variety other situations all of which may be crucial to the future success of the organization.

My comment wasn't really meant to be a critique as much as I was curious about how aware VCs are of internal biasis affecting investment decisions and how you all manage those conflicts.

Bob Jacobson

I'm not at the moment a CEO, though I have been, twice before. Now I'm acting more like an impresario, finding the strategically right vehicles and matching them with the right investors. What a concept: a yenta. So far, it's working out.

My last two pitches -- which get the same scrutiny as a CEO/team presentation -- I used a notebook and a pen. In short, I told the company's story, showed charts I sketched in the notebook or drew new ones, and enjoyed the role of master storyteller. It was not only compelling, it was a respite and a pleasure for my audiences and I, who got to have a conversation for real.

Of course, there will be closer scrutiny ahead and the CEOs had better know their stuff, too. That's true of any company making a successful pitch. But doing away with Powerpoint and getting back to the bazaar's stories, gossip, and haggle returns us to ways of understanding that have their roots in antiquity, yet never grow old.

I'm upgrading to talk.

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