Early stage companies, by definition, have little to hold dear: no revenue, no profits, no awarded patents (usually), no commercially viable product, little customer validation, etc. If a seed stage or Series A startup is valued on anything, it is valued on people — both those in and around the company (say, as advisors and individual investors).
For this reason, when I have an introductory meeting with an entrepreneur, I usually spend 30-50% of the meeting asking him questions about his background. I continue to be surprised at the contrast between how well some entrepreneurs pitch their company or idea, and how poorly they pitch themselves.
So, if you decide to raise capital, practice pitching you at least as much as your company. Plenty of blogs describe best practices on the latter (including Highland‘s own Dan Rosen), but here’s my take on the former:
- Start from the beginning…the very beginning. I like to know where an entrepreneur grew up, what his parents did, what sports and musical instruments he played, and all that other good stuff. Why? Two main reasons. First, people become disarmingly honest when they’re asked to talk about their childhood, so it helps me establish an “honesty benchmark.” Second, many great entrepreneurs exhibit entrepreneurial qualities early in life, so it’s helpful to look for those.
- Discuss prior experiences by name. Telling me you or your co-founder have “had numerous startup successes” or that you’re “on your fifth startup” really tells me nothing about you. In fact, it sounds evasive. You’ll get lots of brownie points instead by walking through your experience in graphic detail, even if it includes some stories you’d rather not share.
- Use numbers to describe your success. Investors love tangible data points, especially when they’re of the “up and to the right” variety. Statements like “I sold my last company for $50 million,” “I managed a $200 million P&L,” or “I grew the top line by 50% year over year for 3 years and maintained at least a 15% EBITDA margin” are great. To the contrary, statements like “it was a good outcome” don’t help that much.
- Describe how the current team came together. It helps me get excited about a business when I can imagine the “eureka” moment. Because assembling a founding team is a gargantuan task in and of itself, learning how that process occurred speaks volumes of a founder’s ability to actively network and assess talent.
- All that said, know when to stop. You should be cognizant of the time left on the clock and your audience’s desire to listen to you talk about yourself. Read body language (or phone language, if there is such a thing) to figure out when an investor wants you to move on. One rule of thumb: if we stop interrupting you, it’s probably time for the next topic.
My final piece of advice is to sit down with five (or more) friends of friends who don’t know you well and tell them your story. Ask them to be skeptical and critical, and to interrupt you if you’re not clear. Think of it like a job interview, and try to make the situation as realistic as possible.
At Highland, I view my job as investing in people first, companies second; and I’m not alone in that regard. Putting some serious thought into the framing of your own story will almost assuredly be a good idea down the road.