When I first moved to the U.S. from England many years ago - more than I care to remember - I needed a visa to work here. The company that hired me brought me in under an H-1, which is the visa category reserved for people with highly specialized knowledge in certain fields or, as my immigration attorney put it, "aliens of distinguished merit". It was a rather flattering description of someone who, at the time, was a young professional really starting out in his field but who was I to argue if it worked?
My job at the time involved international travel and on one occasion I came back into the country through Honolulu so I could take a few days vacation after a business trip to Japan. Anyway, I'm at the immigration officer's booth at the airport and present my passport, my visa and my letter of employment. The officer studies these for a moment and then leans over the counter, looks me in the eye and, very loudly, asks "so, what's so f***ing special about you then?" Which took me - and the people around us - back a bit because this is not typical of the almost universally-polite immigration officers I have met before or after (except in Miami, which is the worst port of entry to the U.S. by far). However, before I could respond, the guy burst out laughing and waved me through with a "welcome home!".
In retrospect this officer would make a pretty good VC. I've heard many different statistics but one is that the average VC may look at 3,000 business plans or in a year and invest in three. Which means saying "no" roughly 999 times out of 1,000. As an entrepreneur that doesn't mean your odds of getting funded are just one in 1,000 but it does mean you'll likely kiss a lot of frogs before you do get funded. But if you do want to get funded you in essence have to be able to quickly convince a potential investor what's so f***ing special about you as opposed to all the other opportunities he or she could invest in.
Which means your first exposure to an investor, often through an executive summary forwarded by someone they know (as opposed to your out-of-the-blue submission), needs to be strong enough and clear enough to grab them by the throat and convince them that this is worth looking at and taking a meeting. Then, as I've written before, when you get the meeting you need to be ready to go full-bore on your idea and what makes it - and your ability to execute on it - so special.
There's still hesitancy by some entrepreneurs - "I'm saving the demo for the second meeting" or "I don't want anyone to steal my idea". Well, VC's are not in the business of stealing ideas - they invest in them (or some will actually say they invest in the team more than the idea in many cases). In fact, if they did make a practice of stealing ideas then the word would get around pretty quickly and that would be highly negative for their business. They are investors so they need to hear the idea very clearly and, if possible, see it in action and some proof points if you want them to do what you want - which is write you a check!
In the last few weeks I've had the discussion about being very clear in an exec summary or pitch with a relatively new reader of my blog who lives outside Dublin, Ireland. She wants to raise money for her startup focused on interactive on-line educational programs in the arts and sciences for children. For her this is even more critical because her physical location makes it difficult to quickly get in front of many likely investors and because it's not the most obvious venture investment opportunity given that its more about approach, content and curriculum than a technology per se.
Her draft was a good start - except that it was not clear what specifically the "secret sauce" or differentiation actually was. As we've started to refine this together we've added that clarity, made it more of the focus (as the solution rather than the prior emphasis on the problem) and then addressed the key issue of how to get the content into the marketplace and adopted. Much of this has taken stuff that had already been thought through but, as she said to me, was in her head and needed to get into the pitch in a brief and compelling way. As we develop this further I think we'll have something that is far more attractive for early stage investment with the right partner or group of angels. In other words its starting to feel, er, special! Now we'll have to see if others do too ...
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