How to Judge Startup Pitch Contests

How to Judge a Startup Pitch Event

David Teten Partner, ff Venture Capital ffvc.com // @ffvc teten.com // @dteten

July 2013 From http://www.flickr.com/photos/mihaibojin/5678197988/sizes/m/

© 2013 David Teten. More at ffvc.com and teten.com

Don’t Take Notes!

Download detailed slides at: ffvc.com/judge


ff Venture Capital: Over 180 investments in over 70 companies

Investments as of July 17, 2013 Only logos of active companies whose investment from ff VC is publicly disclosed are shown.


Judging is performance art.


Investment Search Process (# Companies)

Angel groups using Gust

(2010)[i] ff Venture Capital

(2012)[ii] Typical

entrepreneur Profiled initially 20,850 NA ~3-6 Target Selected 1,315 ~1,700 ~3 Met 1,047 ~1,000 NA Due diligence 577 ~18 2

Invested/launched 541 ~15 1

Deals as % targeted companies

33.5% (2.1% of

submissions)

0.8% 33%

[i] Available at http://angelsoft.net/a/venture-valuation , as of twelve months ending March 17, 2010. [ii] David Teten.


ff Venture Capital Decision Criteria

•  Team. We want to know what qualifies you to execute your idea successfully and better than the five other companies in your space: work history, network, and skills are all key.

•  Demo. We almost always require a demo, or at least a mockup. •  Market. What is the problem, why does it exist, and how big is the opportunity? •  Solution. Your value proposition: how you solve this problem faster, cheaper, smarter. •  Business Model. How do you make money? Who pays, how much, from where? •  Customer/user. Who they are and how many? How will you reach/acquire them? •  Competition. Know every competitor and what are the current solutions to this problem, and why they

aren’t addressing your market adequately. List the major competitors, understand their processes and what your competitive advantage is.

•  Financial Overview. What are the expected revenues, expenses, and EBITDA three years out? How long will this round’s cash last you?

•  Funding. How much are you raising and how are you going to use the money? To grow a team, to support overhead, to expand? How much have you raised thus far and from whom?

•  Milestones. What is your vision for the future, measured in milestones for the next 3 years? Note that in our board meetings, we will evaluate your progress against these milestones.

http://ffvc.com/resources/pitch/

© 2013 David Teten. More at ffvc.com and teten.com Based in part on http://larrycheng.com/2009/10/01/the-categories-of-risk-in-the-vc-brain/

ff Venture Capital Investment Risk Assessment Types Of Risk Risk Assessment

Product risk •  Does it work? Market risk •  Adoption?

•  Size? •  Timing?

Competitive risk •  Existing and potential competitors? Financing risk •  Can the team raise money? Execution risk •  Business development, operational

and sales skills? Team risk •  Breakup risk? Exit risk •  Out of angel investors’ control


Get the logistics right

•  Speak into the mike •  Arrange screen so you can see it •  Pick the seat by the moderator/

closest to the audience •  Research the audiences and the companies

From http://www.flickr.com/photos/fordschool/6910473645/sizes/m/


Master your elevator pitch. For ff VC, we highlight •  Early-stage technology venture capital fund •  Founded 1999, with over 180 investments in over 70 companies •  First investments typically $100-$500K at valuations of <$5m pre-money •  Follow on in later rounds for best-performing startups •  Prominent investments include: Cornerstone OnDemand (IPO); Quigo

Technologies (sold to AOL for reported $340m); HowAboutWe; Indiegogo; Klout; 500px

•  Around 20 employees with deep intellectual capital: strategy, recruiting, accounting & finance, communications & public relations, software development, best practices, mentor network, community development, discounted services, etc.

•  Discuss your personal area of responsibility.


Choose and demonstrate a personality

•  Honest •  Personable •  Resourceful

From http://www.flickr.com/photos/theghostofgraingertown/7252368802/sizes/m/


Meet the players

•  Get the business cards / contact information for the other speakers, moderator, and sponsor

From http://www.flickr.com/photos/thos003/6024170424/sizes/m/


It doesn’t matter what you say if you’re funny

•  Speak truth •  Draw analogies •  Use graphic images

From http://www.flickr.com/photos/shankbone/4566500007/sizes/m/


Always be helpful, not critical

•  Make pivot suggestions •  Talk about unsolved problems

From http://www.flickr.com/photos/sethoscope/2352330747/sizes/m/


Cold call the audience

•  Mention the sponsor •  Mention anyone in the audience whom you know •  Mention fellow judges

from http://www.flickr.com/photos/23439761@N03/3258313816/sizes/l/


Further reading

How to judge startups •  http://exitevent.com/how-to-judge-a-startup-

competition-13328.asp •  http://startupweekend.org/organizer/resources/mentors-

speaker-and-judges/

How to speak on a tech panel •  http://blog.guykawasaki.com/2006/01/how_to_kick_but.html


Further reading

How to moderate a panel •  http://blogs.hbr.org/cs/2013/05/how_to_moderate_a_panel_like_a.html •  http://www.fripp.com/blog/how-to-effectively-moderate-a-panel/ •  http://www.scottkirsner.com/panels.htm •  http://www.stand-deliver.com/njbiz/2006/010206.pdf •  http://blog.guykawasaki.com/2006/03/how_to_be_a_gre.html •  http://paul.kedrosky.com/archives/2006/06/10_rules_for_be.html •  http://www.sarahweinman.com/confessions/2005/09/panels_in_moder.html

How to be a great conference speaker •  http://katemats.com/public-speaking-at-a-conference/ •  http://cameronmoll.com/archives/2009/02/20_tips_better_conference_speaking/ •  And many books on this topic available on Amazon


David Teten (teten.com) •  Partner, ff Venture Capital, early-stage technology venture capital fund •  Founder and Chairman, Harvard Business School Angels of New York . Co-founded

Venture Capital Access Program, introducing women and minority entrepreneurs to Harvard-affiliated angels

•  Lead author, The Virtual Handshake: Opening Doors and Closing Deals Online

•  Lead author of first-ever research study on best practices in private equity/venture capital deal origination

•  Lead author of first-ever research study on best practices of venture capitalists in increasing portfolio company value through operational support

•  Harvard MBA 1998, Yale BA, both with honors. •  @dteten


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@dteten


Disclaimer

This Presentation is for the exclusive use of the recipients to whom it is addressed. References to the “Presentation” includes any information which has been or may be supplied in writing or orally in connection with the Presentation or in connection with any further inquiries in respect of the Presentation. This Presentation is not intended to serve as basis for any investment decision. While the information contained in this Presentation is believed to be accurate, the Preparers have not conducted any investigation with respect to such information. The Preparers expressly disclaim any and all liability for representations or warranties, expressed or implied, contained in, or for omissions from, this Presentation or any other written or oral communication transmitted to any interested party in connection with this Presentation so far as is permitted by law. In particular, but without limitation, no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on, any projections, estimates, forecasts, analyses or forward looking statements contained in this Presentation which involve by their nature a number of risks, uncertainties or assumptions that could cause actual results or events to differ materially from those expressed or implied in this Presentation. By its acceptance hereof, each recipient agrees that none of the Preparers nor any of their respective Representatives shall be liable for any direct, indirect or consequential loss or damages suffered by any person as a result of relying on any statement in or omission from this Presentation, along with other information furnished in connection therewith, and any such liability is expressly disclaimed. Except to the extent otherwise indicated, this Presentation presents information as of the date hereof. The delivery of this Presentation shall not, under any circumstances, create any implication that there will be no change in the affairs of ff Venture Capital or HBS Alumni Angels after the date hereof. In furnishing this Presentation, the Preparers reserve the right to amend or replace this Presentation at any time and undertake no obligation to update any of the information contained in the Presentation or to correct any inaccuracies that may become apparent. This Presentation shall remain the property of ff Venture Capital and HBS Alumni Angels. This Presentation does not constitute a recommendation regarding the shares in ff Venture Capital or HBS Alumni Angels. No securities commission or regulatory authority in the United States or in any other country has in any way opined upon the accuracy or adequacy of this Presentation or the materials contained herein. This Presentation shall not form the basis of any contract. The distribution of this Presentation in certain jurisdictions may be restricted by law and, accordingly, recipients of this Presentation represent that they are able to receive this Presentation without contravention of any unfulfilled registration requirements or other legal restrictions in the jurisdiction in which they reside or conduct business. Date at your own risk.