#2 no NDA

Here are reasons why VCs should sign NDAs:

(NDA – Non Disclosure Agreement)

• it is common business practice
• all an entrepreneur, especially in early stages has, is her idea. it needs to be protected
• VCs can share data with competition – sometimes their own start-ups, or corporate development of big players in the space, ultimately hurting the entrepreneur

you can try to get a VC to sign an NDA. but VCs do not sign NDAs

so i am not sure it is a good start to a relationship.

( i have signed about 5 NDAs to date – and in general, it was a worthless procedure. lawyers made money. in one case the entrepreneurs who asked for an NDA actually stole the idea from another entrepreneur)

professional VCs treat your idea with confidentiality. not all of the time, not everyone. but extremely often. and when discuss your idea with others, it is with the intent of analyzing the opportunity and in a manner that will not disclose your secret sauce.

but my point has two other flavors to it:

• what counts is not just your idea, but your ability to execute upon it!
• what can really be protected by NDA, is usually not interesting for a first meeting, and ultimately, not the reason why a VC will invest in you.

in the software space, you ability to connect with people, communicate your idea, hear their feedback and embed it into your product counts more, much more, than your original idea.

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#1 do not be late

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first, i hope your idea and company is not late to market.

it is really hard to play catch-up, especially out of israel.

but what i mean is do not arrive at the meeting late.

you actually have a lot less time than you think to present and connect with a VC.

even if the calendar said it is an hour. even if the partner at the vc firm promised. even if the secretary is your friend.

why?

because:

• the meeting room will be cleared late by the previous meeting
• the projector will not work
• the VC will walk in late

so you do not have 1 hour.

in fact, you have only 20 minutes. only 20!

10 minutes will be waisted because of the above

20 minutes will be for the presentation itself

and if we are lucky

30 minutes will be spent discussing the opportunity – this is a good sign,

or

answering questions often because the presentation is not good.

this is not the same 10-20-30 rule of guy kawasaki.

in very few successful meetings, the entrepreneur presents for more than 20 minutes.

either because they are engaging, or because they are not

if you talk much more than 20 minutes, i am not sure you did a good job. Often, this is because we are too reliant on PowerPoint and the slides we prepared. we are reading slides rather than telling a story. building a dream.

from my experience, your audience (israeli VC) control the flow, you control the content.

20 minutes. that’s it

if you are successful, there will be plenty of time for more talk.

if you are the one to be late, you will be tense. your 20 minutes will be less effective

btw, i am not good in time management. so there is room for me to grow here.

Alternative point of view:

i feel quite confident about the above piece of advice, but i promised to show all 3 sides of the coin:

• often, the VC is going to be late, why not me?
• it will make the meeting more memorable
• it increases the chance for a follow-up meeting, as not everything will be discussed

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pitching a VC – mistakes no one tells you about

i have been a VC for over 10 years. have been in over 1000 first time meetings

the purpose of this series of posts is to share with you some thoughts about what i consider mistakes entrepreneurs make in a first time meeting.

press here for the entire series.

often, these items are not discussed and the knowledge that can be shared is lost

that is why i am writing

it seems that the gap between entrepreneurs and VCs especially in israel is growing. and it is Gemini’s role and mine to try and reduce it through blogs and events. i would like to think of the israeli hi-tech sector as a big virtualized company. i am right now in the finance department of this virtual organization. most entrepreneurs are in r+d or biz dev or product management. the fact is, this organization is under threat. it does not innovate well enough. it does not scale. who will suffer from this? our country and our kids. so this is a small attempt to help us work better together

i do not own ‘the truth’. to many of these ‘rules’ there are some very smart and experienced people who will advice you to do exactly the opposite of what is said here. i will try and present an alternative argument as part of good dialectics.

i strongly recommend a book by guy kawasaki called ‘the art of the start‘. many of my thoughts on these and other ‘VC 101’ issues are influenced by his ideas.  some have evolved, some have been polarized.

what is the purpose of ‘the pitch’?

to engage, and get interest for more meetings, a process. so if you do a good enough job presenting your idea, there will be more meetings: