How to establish credibility when pitching investors (VCs or angels) by Jeff Bussgang, Flybridge Capital general partner and Harvard Business School EIR

1. Establishing Credibility in a PitchJeffrey BussgangHarvard Business School EIRFlybridge Capital Partners General Partner February 17, 2011

3. Context About VCs and Angels Most VCs and Angels have ADD – operate on “BLINK” instincts Want to SEE everything, but DO very, very few deals Make their decision within the first 10-15 minutes Typical VC and angel will invest in one out of every 300-500 deals they see Long odds – you need to really stand out Like college applicants – triage quickly

4. Investor’s Decision Tree Worth 3 minutes (email, phone)? No Worth 30 minutes (phone, in person)? Ignore No Worth 60-90 minutes (in person)? Pass gracefully No Worth 2nd mtg (in person)? Pass but stay In touch No Serious due diligence Pass but be helpful

5. Top 3 Things To Do Be gracious and personable Say something that makes you smile…authentically Tell your personal history, tell a story Be crisp and on point Make it relevant – don’t go off on tangents If you can’t show good summarization skills in a pitch meeting, how will you handle a board room? Keep it short Personal introduction should take no more than 5 minutes Team introduction 10 minutes

6. Top 3 Things To Avoid Do not exaggerate Assume everything you say will be verified in due diligence Assume the listener is a cynic and a professional BS detector There’s no “I” in team If you are self-aggrandizing, investors will assume you can’t build teams Do not name drop No one is going to be impressed with who you know unless the relationships are both real and relevant.

7. Typical Investment Criteria Tangible things investors like to see: Very big market Unfair advantage Attractive business model Unique technology or business model approach Intangible things investors like to see: “Pied Piper” – an ability to recruit and retain a great team, partners Interpersonal chemistry Movie, not a snapshot

9. Will want to own 1-10%

10. May want to be engaged or not (often a hobby, sometimes a personal mission)

11. Can add tremendous value and be great business partners

12. Can be total disasters

14. Questions?