The Conversational Pitch

Lately I have noticed an increase in entrepreneurs coming into USV (or videoing into USV) and talking to us about their business without the use of a deck.

I don’t know what to make of that to be honest.

But I like it for a bunch of reasons.

It allows for more conversation and less presentation.

It also shows that a founder or a team can talk about their business intelligently without the “crutch” of a deck.

I am NOT recommending that anyone take this approach. I like to see our portfolio companies use decks when they raise rounds and we help them improve these decks as part of helping with the fundraise process.

But as a receiver of pitches, I do like the unscripted conversation.

It tells me a lot about the team.


Comments (Archived):

  1. Steve

    No powerpoint does not equal unscriptedYou still need to know the story, and there is probably more prep involved if it’s done well

  2. awaldstein

    The language of communications is definitely conversation.

    1. JLM

      .The language of communications is based on the “learning” style of the audience. We frail humans process information, learn in different ways, and in a combination of ways. Our learning style changes with time.Unless one knows the audience very well, it is imperative that communication be a combination of personality, spoken words, written words, discussion, and, most importantly, persuasion.This last one, persuasion, is often the missing ingredient. People don’t know how to persuade. We mistake persuasion for doing missionary work, trying to convert people rather than just getting them to act.In this way, a presenter is able to speak to the intravert and the extravert (not in the way these words might be used in pop psychology, but the way they are used to describe how people process information).There are people who cannot even begin to understand the information until they have slept on it. There are people who make snap judgments at first opportunity.One has to be ready for both.JLMwww.themusingsofthebigredca…

      1. JamesHRH

        Agreed, hence my adoption a quick and ready personality framework. Putting people into boxes allows you not to do something really dumb, early on.And, it may help you discern the drivers of behaviour, as you get to know people.

        1. JLM

          .People are interesting. If one is a student of people, the same words can get a different, better, reaction if delivered in a different manner.I always found it interesting to see who were the good officers in garrison, the field, and difficult situations.They are not even remotely the same.You know nothing about a person until you see them perform under stress.Much of life is setting specific.JLMwww.themusingsofthebigredca…

    2. JamesHRH

      My best friend & consummate BD person was ‘ raised in a house where we did not use our words. ‘His Pops was right off the farm, great guy, but, um, stereotypically male. He used this line when his son was the target of inappropriate behaviour at a Montessori school.Just heard the line, love it – it goes to where @JLM:disqus lives – reading what people don’t say (body language, tone, etc.).

    3. pointsnfigures

      @SixgillBlog:disqus yup. Today my mind is on Sonoma Valley where the wineries are and my bro in law is a volunteer firefighter and The Cubs. Lots of wineries and vineyards are gone. 50k acres burning right now (11:33 CT)

      1. awaldstein

        Yup.Have friends up there and that is the area where I learned to love wine in the 90s.I also have friends who lost their homes in Vieques a few weeks ago.Lots of scary shit going on. With Mother Earth and the core of our value systems.I need to compartmentalize my focus in order to be productive or else I spin.That includes less time here unfortunately as well depending on the topic though I will always respond to friends regardless of topic.

      2. JLM

        .It is not just the vineyards and wineries, there is a huge residential tragedy. Friend of mine who owns a vineyard there has lost the homes of his children. It is a huge disaster.JLMwww.themusingsofthebigredca…

  3. JimHirshfield

    Conversational is the key with or without slides. Talk with, not to, people.

    1. awaldstein

      You are a salesguy and this is your trade.Really hard to teach.

      1. JimHirshfield

        So…NOT easier said than done?

        1. JamesHRH

          But the doing is basically saying. I’m confused.;-)

          1. Girish Mehta

            So basically – “Do as I say, Don’t do as I do”….No, wait :-).

          2. JimHirshfield

            I’ll send over a slide deck

          3. CJ


        2. ShanaC

          no, you could write a whole series of guest posts on how to make this easier, because it is just so difficult to teach

      2. JamesHRH

        Based on the number of people who have made zillions trying to teach it, you are likely right.

  4. William Mougayar

    I like that approach, although the deck will be needed at some point to ground them with some facts. But if the team can articulate what they are doing with passion, conviction and good verbal communications skills, that’s a good check mark to have.

  5. kenberger

    For most entreps: great in theory, often tough in practice.I think a helpful add here is: how do they get in your door for a booked meeting in the first place, without materials such as a deck, unless you’re just talking about entreps you already know or have captured serious attention.The sentence: “coming into USV and talking to us” makes your doors seem way more open then you’d probably acknowledge they are, right?

    1. jason wright

      if someone were to make the effort to come knocking on my door i think i might take them seriously. an email is just too easy.

      1. kenberger

        Ditto, emphatically. I welcome it all the time.But I ain’t USV, know what I mean?

        1. jason wright

          i know, but you are working on that 🙂

          1. kenberger

            if i even came close, the Q is would I change that policy, and i’m pretty sure the answer is i’d have to.

    2. fredwilson

      it depends on what you are doing. if you are building a new and better consensus mechanism, our doors are pretty wide open.

  6. jason wright

    i do think that some forms of tech can actually get in the way of face to face human communication. we are already a highly evolved natural communications device. i love to draw out ideas for people with a pen/ pencil on paper (or the modern equivalent of a touch screen and Wacom pen), and i do not not like PowerPoint stuff in a one to one or one to two setting. even rehearsal can get in the way, making a presentation look more like a faded photocopy than a sharp original.

  7. Chris van

    The same applies to the Board room; most of the time too much time is spend on presentation and not enough on discussion and decision making. Sending the deck before a meeting allows the recipient (whether it is an investor or Board member) to prepare which leads to more meaningful discussions and Q&A.

  8. Dorothy

    When I was in the VC business (a long, long time ago), I frequently would ask a team to put away the deck and just talk to us about themselves and the company. It always seemed to be a better way to get at who the team was and what they were trying to do.

  9. LIAD

    initially at least, the ‘presentor-presentee’ dynamic puts entrepreneur-investor on opposite sides of the table. one doing the work the other judging and critiquing it. not conducive to building a positive relationship based on mutual respect and value. power dynamic is off.if you only get one shot at a meeting you need to pitch all guns blazing and using a kick-ass deck invariably works best. however if you have the chance to build towards a formal pitch through less formal non-all-or-nothing conversations with inbuilt flexibility and joint exploration – that may get you to the same destination yet built on a stronger more aligned relationship

  10. BillMcNeely

    With the seemingly lack of people skills in tech as we only pay attention to the data is this a good barometer of EQ and social ability?

  11. Claire Belmont

    Agree, as a founder I like starting with a conversation but found having a deck prepared beforehand is key to clear concise communication, thinking through all parts of the buisness, and most importantly feeling confident.

  12. Semil Shah

    The deck is to get the meeting, the quality of conversation closes the deal.

    1. JaredMermey

      Do you believe in a different deck to get the meeting vs to run the meeting?

      1. PhilipSugar

        I believe the deck is to get the meeting and have people ask questions. The whiteboard is to run the meeting.

      2. Semil Shah

        Absolutely! The deck “to get the meeting” should very short (15 slides max) and suitable for the GP to share with his/her colleagues/network. Assume it will be shared. There’s a longer deck + appendix to use *in conjunction* with a deeper in-person conversation. My two cents.

        1. pointsnfigures

          Ever invest off a deck?

          1. Semil Shah

            Meaning, a) I just see the deck and don’t meet the team or b) I meet the team but all they have is a deck?

          2. Pointsandfigures

            meaning, you see the deck, feel like you are going to write a check-then meet the team and commit. That’s sort of investing off the deck. Apologize for not being more clear

          3. Semil Shah

            Oh yes, a few times. Most notably with SkySafe.

    2. alexanderjarvis

      Absolutely agree

  13. PhilipSugar

    Here are my thoughts:Generally I do not like Powerpoint, and I actually have somebody prepare my “decks”Many times people use these that like to “play” they are businessperson or an entrepreneur, no different than holding tons of meetings.I agree with Semil that a “deck” can gets you the meeting.In general if you are trying to reach a wide audience (investors public or private, employees when you have more than 20, an audience at a conference, etc, you have to have a deck)But if you are having a meeting with less than ten people? If you don’t know them, yes you need a deck, but send it before.If you know them, then send out a staccato email like I try with my posts, bullet points.

    1. pointsnfigures

      When I speak at universities, I never use a deck. I tell students that I know they are suffering “death by powerpoint” and instead we have a conversation

      1. PhilipSugar

        I love speaking at Penn. The “kids” energize me so much. I am not a great presenter. But I am great at taking questions and riffing with people. I always talk for ten minutes and then I pick on somebody to ask a question. Then we riff.

      2. sigmaalgebra

        At a university, all this stuff about finely polished presentations, decks, etc. is just total BS:Instead, what is just crucial is that the speaker has something important to say.Given something important to say, the good students at a university can totally “get it” from next to nothing in the quality or style of the presentation and, indeed, do so daily in class.E.g., my brilliant wife wanted to know some AI. So, I sat her at my home PC and in 15 minutes showed her how to log into VM/CMS and use XEdit and Rexx. As a first exercise she used XEdit to write some nice Rexx software to analyze disk space.Next she wanted to learn how to use our AI language KnowledgeTool. The lecture was about 30 minutes, and a week later she had a good, running program. Another lecture of 15 minutes, and a week later she had the best early AI program our KnowledgeTool team had ever seen. She had notes, on one 3 x 5 card.Later we needed a framework for all system monitoring data for all computers, and in a few minutes I outlined such on a white board. The next day one of our guys had it running in code.As a grad student, I saw a problem in a class and wanted to pursue it. I got a one semester reading course. Two weeks later I had a nice solution. I submitted the solution just in handwriting on paper. That was enough: One of my results was surprising, and word spread quickly. One of my profs walked up to me in the hall and said “I heard about your result. It says that for Brownian motion …” Yup. No decks. No presentations. No tricky this or that. Later I typed in the work and submitted it to the journal JOTA — Journal of Optimization Theory and Applications. The paper was accepted and published right away. Done. My good results are right there in the paper.I’ve sat in a lot of classes and there learned a lot of really good, high end stuff very well. I’ve taught a lot of classes in ugrad and grad school, and got across a lot of stuff. And in all of that, none of these super triple tricky presentation considerations played any role at all.If VCs need such special stuff, then they are not much interested in receiving the information. Maybe they want to set up filters, arbitrary hurdles and hoops for the entrepreneurs to jump through, be arrogant, have a tough guy attitude as an initial negotiating tactic, etc.But, for an entrepreneur, if they have a really good project and really know what the heck they are doing, then with high justification they stand to be next to terrified to have to report to a BoD with a lot of Williams College history majors with MBAs; such people are just not in a position to understand anything important about a good technology project until the accountants can say it’s really valuable as a going business, and even then the MBAs won’t understand the really important parts of the project, e.g., be able to evaluate the future promise of the business.In the more developed countries, lots of high end projects get presented and evaluated. Such evaluations are by the university Ph.D. committees, NSF, NIH, DARPA program officers, etc. Presentations are from applied mathematicians, physical scientists, bio-medical scientists, engineers, architects, etc.VCs are asking for presentations that are wildly different and, really, with considerations that are essentially destructive nonsense.As at…VC returns have not been good. Considering what VCs want in presentations, no wonder.The VC system is broken. VCs need to borrow from other areas of our civilization that do proposing, evaluating, and executing projects well.Good entrepreneurs should stay far away from the VC system or get themselves also lined up for low RoI.Really good projects that do take VC equity funding sometimes have stock arrangements — e.g., Google, Facebook — that keep the VCs muzzled in cages the heck out of the way, passengers in the back of the plane just along for the ride and nowhere near the cockpit. Williams College history majors with MBAs? BS.

    2. JamesHRH

      Comment about ‘ playing ‘ is very astute.

  14. pointsnfigures

    Maybe best to send the deck prior-let everyone prepare. Might even be better to get out of the office and go for a talk+walk

  15. ErikSchwartz

    It’s fine if you have a deck as a leave behind. At some point in the raise process you are going to have to demonstrate that you can have an intelligent conversation both with and without slides.A pitch consists of three parts, the demo, the discussion, and the deck. In that order of importance.Also, in my case at least, presentation decks to speak to are very different than decks designed to be consumed by an audience without narration.

  16. Jose Cabiedes

    Since inception, we do not allow (in principle) ppt presentations at the meeting; nor web/App reviews. We take only excel spreadsheet with historical information and no more than 6 quarters forward looking. A bit extreme but as a starting point works well.

    1. JamesHRH

      Numbers are a god common language to speak 😉

  17. David A. Frankel

    Here is how I coach the sales teams and companies I advise: slide decks (and product demos) are NOT the star of the show. You and your understanding of the material are. Everything else supports you and your pitch.You need to have a very clear strategy for what the outcome of the meeting for all parties should be in advance. If you understand what you are discussing, a white board, your words, and HOW you deliver the material (tone, pace, eye contact) should be sufficient to get you to that outcome. That doesn’t mean you ramble or shoot from the hip — you still need to stay tight, focused and in command. If you need slides or a demo, they are there to SUPPORT your points, NOT DRIVE them. Also, provide more visual content that allows you to provide color commentary vs. words.The key to a successful meeting is in how you engage the audience. As Fred wrote, these meetings are a conversation not a presentation.

  18. JLM

    .A deck is the chapter headings for a conversation.What is the first sign that the audience is interested? They ask questions. Questions are the way a convo starts. Screw up the answers to the questions, no deal.The most important thing to remember about any presentation is — what is the ask? What is the desired result? What do you want the audience to do next remembering that fundraising is a 7-touch process?Every entrepreneur should have four “decks” in mind — elevator pitch, taxicab pitch, boardroom pitch, on boarding/hiring pitch. The taxicab pitch subsumes the elevator pitch. the boardroom pitch subsumes the taxicab pitch.The challenge with a conversation is that one is held hostage to the memory and retention of the audience. You have to create a residual memory of the experience upon which the audience can reflect. This is a worthy objective of a pitch deck — the residual memory of what was said (in addition to being the chapter headings).With many audiences, particularly including VCs, the big hurdle is getting the meeting in the first place which often requires the delivery of an enticing deck to whet the interest of the audience.Persuasion is not an easy task. But, it can be reduced to a thoughtful process. And, it can be dramatically improved with practice. Practice. Practice. Practice — so it seems effortless and natural.JLMwww.themusingsofthebigredca…

    1. JamesHRH

      I like the chapter headings idea.I think the better thought, when deck building, is that it takes 7 contacts to close.

      1. JLM

        .It is imperative to have realistic expectations for each step of the 7-step process. It is a courtship and, like a courtship, it has an end game, but it may not advance in a straight line. In fact, it rarely does.The other thing which is essential to recognize is that the audience is doing a lot of other things and may not be able to focus on your deal at the same time and at the same rate of speed as you may or you may desire.How the pitcher follows up is key to the response received.It sounds hopelessly Old School, but I find that a handwritten note on good, high quality notecards is the most effective, memorable follow up. I have been doing this for so long, it is second nature.It falls under the classification that “your generation did not invent sex.”I just know it works.JLMwww.themusingsofthebigredca…

        1. JamesHRH

          Handwriten is increasingly rare, in a generation it will really stand out (kids not being taught cursive).

          1. JLM

            .I write to a great number of people. When I ended a decade long relationship with GE Capital, I wrote a note to Jack Welch telling him how much I had enjoyed the relationship.He responded with a handwritten note and an invite to come back to them at some time in the future. Years later, when I showed that note to a bunch of guys at GE Capital Houston (I had worked with GE Capital Dallas), it opened the doors like magic.I got the nicest note one time from Donald Rumsfeld. I had written to him when he was Sec Def and had initiated the Stryker Brigades which the Army brass fought him on and which I thought was the future of asymmetrical warfare.I told him I came from a line of soldiers and he researched it and knew my father’s and mother’s name, rank and service record.Geo W Bush, when Governor, was a big notecard guy.JLMwww.themusingsofthebigredca…

          2. BillMcNeely

            The Stryker was one of the best vehicles the Army has produced in the last 20 years in my opinion.

          3. Chimpwithcans

            I would be really interested in the structure of these notes – how do you start them? How formal / informal? Signoffs, signatures etc? I wouldn’t know where to start apart from ‘Dear xxx…’ – my fear being: is saying “Dear” in a business note too much?

          4. JLM

            .Mix –Great seeing you in Jo’berg last week. I thought we had a great discussion in regard to our new venture. You posed some great questions.I will get back you with definitive answers from my team.I’m in town in two weeks and I’d like to drop by to share a cup of coffee.Thanks for your time and insights. Here’s my latest contact info.Best –JLMTakes two minutes. Make sure you have the right mailing address. Do this within 30 minutes of leaving the meeting and you are done with it. Drop your card in the note.

          5. Chimpwithcans

            That’s a memorable note to receive. Nice one!

          6. ShanaC

            I write in cursive, this apparently confuses people my own age

          7. JamesHRH

            That’s amazing.

        2. PhilipSugar

          You are giving away secrets. The key is to have customized note cards which are embossed and use a good pen https://uploads.disquscdn.c

          1. ShanaC

            wrong ink choice though – you want a permanent fountain pen ink like noodlers :p

        3. LE

          hopelessly Old SchoolI keep a wall of notes that are handwritten thank yous that I have received. I also have cases where customers send payments with hand written or typed notes. (Attorneys in some cases memorializing transactions). I think this is great.The good thing about anything ‘old school’ is that it stands out and is generally viewed positively because someone has show respect by putting in effort. [1]Coming from a background of old school business I find that the internet has changed things in that many businesses don’t feel they have to work that hard for individual sales it’s all about big movements of the needle. And I think many of the people running these companies never had to grind it out and/or beat their brains against the wall to gain an account or make a sale. Like the restaurant at the turnpike rest stop, it’s as if there is always another customer around the corner to take the place of the one that you just lost through lack of attention and/or bad service or product.[1] Bad form is receiving sales and marketing postal letters where the person sending the letter doesn’t take the time to sign it personally. And I am not talking about cases where 1,000,000 are being sent either. I mean small type vendors or salespeople. Instead it’s either stamped or signed by assistant.

        4. Chimpwithcans

          Isn’t it funny that a handwritten note to someone you have met, spoken with, interacted with in the same room, is no longer the norm and requires explanation? It should be more normal than it is. I love the note idea, and I’m stealing it for my own nefarious purposes. Great comment, Thanks.

    2. Susan Rubinsky

      I often write handwritten notes to my client base, either after a successful project or just randomly throughout the year.

  19. sigmaalgebra

    I tried lots of decks, and none of them with a dime would cover a 10 cent cup of coffee. So, my next effort at a deck should be something like:New Web site.Dirt simple HTML, minimal JavaScript, works on Web browsers < 10 years old, smartphones to desktops.On average 24 x 7 one user a second.Site somewhat game like, for a significant fraction of users “addictive”.High end user demographics, Mercedes, BMW, opera set. Slowly expanding to general population in more developed countries.On average, each user sees 8 Web pages with a total of 40 simple ads from ad networks.Ad revenue > $100,000 a month.Crucial, core technology from high end, original, high quality secret sauce.Barrier to entry from secret sauce and unique data.Beta test ended with 1 user each 10 minutes, and usage has about doubled each month since then.Have the first good, and an excellent, solution for a problem important for nearly every user of the Internet.Back of the envelope estimate of potential company value — $1 T.Solo founder, one server from < $2000 in parts at left knee.Ah, a “deck” in 13 “points” and about 161 words!Maybe some VC would like that “deck”? But by then I won’t accept a Delaware C-corp, BoD, or equity check!

    1. TK

      This sounds too good to be true.. particularly your potential company value of $1T. That would be problematic for you.

      1. TK

        please ignore if your post was just for fun.

      2. sigmaalgebra

        I’m perfectly, 100% fully serious. No joke at all. Wrong? Maybe. Joking? No.I’ve written several pieces of advanced software that worked just as intended. I believe the software I’ve written for this project will work just as intended also.$1 T? That’s mostly just from the pointHave the first good, and an excellent, solution for a problem important for nearly every user of the Internet.Getting so many users would be a biggie, a first, but, still, the $1 T is just “back of the envelope” arithmetic. E.g., so far the project is to be just ad supported, but, when start talking $1 T, there can be some question if the whole ad industry can supply revenue enough for that much company value. Roughly now apparently the ad industry can, but with enough more really attractive Web sites, ad rates might fall and reduce the $1 T. Maybe.Then, sure, in case ad rates do fall, some of the unique data I get can be used for some unique, likely especially accurate and effective ad targeting. IMHO, much better ad targeting can be worth much more money per ad displayed. So, even if ad rates fall, rates for really good targeting can be much higher.For more skepticism, for estimates, might have to fall back on generalities that if can get on average 30 minutes of eyeball time once or a few times a week for nearly all the Internet users — smartphones to desktops — in the more industrialized countries (the users should be from all around the world, including some 7 year olds in Thailand, but the ad revenue stands to be mostly from the more industrialized countries), then there should be some ways to “monetize” that. But such generalities are tough to be very solid about.So, for now, have to swallow that ads can build such a company value. So far, for now, that seems reasonable.But any and all contacts with VCs are all totally dead on arrival before the revenue figures, and those are yet to be: I haven’t completed beta test yet. I can say I’m in alpha test but have more to do.The technical work is essentially all done and ready for serious production, well past $100,000 a month in revenue. From my software design and timings [especially efficient, and should be especially so with solid state instead of rotating disk drives and/or with enough main memory so that SQL Server can do some good caching or if for some of the specialized work I write a little code of my own, use solid state drives, and avoid one use of SQL Server and depend on the file system caching from Windows, or in an extreme case, do some of my own caching — likely won’t do that] my ballpark estimate is that from one server with < $2000 in parts I should be able to get annual of about $3 million a year. Running several such servers with some Cisco front end load leveling, e.g., just simple crude round robin, with the same software could increase capacity by another factor of 10 for $30 million a year in revenue. With my code for my Web session state store, my code needs no “session affinity” of a particular Web site session with a particular server which makes some Cisco simple load leveling work easily.For another factor of 100 in capacity, I should tweak my code some to do better with a lot of server farm parallelism.So, the technical work is now 24,000 programming language statements in 100,000 lines of typing for a Web server, a Web session state server, two specialized back end compute servers, and, of course, SQL Server. Soon I’ll drop my use of the Windows approach to a Web site log file and implement my own approach for much higher performance and much improved ease of use and site monitoring. The code of the log file server will be the same as for the Web site session state server with some code removed and a file write statement added — dirt simple. All these servers communicate with just simple TCP/IP sockets with object instance de/serialization and using the TCP/IP queuing for FIFO work queuing — right, all my servers are simple minded single threaded.But without being live with “traction”, all that “deck” is totally worthless to VCs. By the time I have the traction, the C-corp, BoD, and equity check will be worthless to me — no thanks. I’ll settle for an LLC, not a C-corp thank you.Currently? Wanted to be in heavy alpha test by now. But, it rained! In this case, I had a hardware problem that corrupted the data on my main boot partition E:. But I have lots of good backups of E: from the Windows NTBACKUP. So, I tried to do a restore of my corrupted boot partition using the restore feature of NTBACKUP. So, I booted D: and used NTBACKUP to restore E:. Result: Lots of data was written to E:, but E: would not boot and, then, neither would D:. Thanks a lot Microsoft. Then I booted C: and used NTBACKUP to restore E:, and then none of C:, D:, or E: would boot. Thanks again Microsoft!So currently I’m rebuilding ALL my software installations on E:. By now I’m over half done. And I need to find a good backup and restore means for E: Candidates include Data Lifeguard Tools and Acronis True Image. And I have a spare hard disk I can install for the images. So, it rained!So, it’s Windows mud wrestling. It’s not pleasant; it’s a huge waste of time; I can do it; I’ve done it too often in the past; each time I do it I get better notes on how to do it faster the next time; and I’m getting there. Well, have to expect some rain, right?For this startup, all the technical work that has been uniquely mine, e.g., not Microsoft mud wrestling, has been fast, fun, and easy with no problems of any kind. And for the Microsoft mud wrestling, as nasty as that is, I can do it.There’s not much chance that anyone else will solve this problem before I do: The barriers to entry in my little deck are correct and strong.So, soon I’ll get my development computer working again, do the alpha test, likely tweak the code UI/UX a little, gather more of the unique data, do the beta test, go live, get publicity, users, ads, and revenue. And with all of that, no VC from Boston to SF will touch my project with a 50 mile long pole.If I’m successful going live, then lots of VCs will hear about me and, from common rumors on the Internet, try my Web site and call me, and then I will remind them of the times I sent them descriptions of my work that they ignored.Partly the VCs don’t want me because I’m a solo founder. Likely they don’t like the idea of some crucial, core “secret sauce” since they would prefer that all the technology be just routine software that they could hire anyone to maintain.Again, by the time I have the revenue that will be the “traction” the VCs want, especially being a solo founder, I will have enough cash for growth that I won’t need, want, or accept equity funding.I especially don’t want a Delaware C-corp or a BoD. And then there would be the funding term sheet where, for a check that was too late and, then, I didn’t need or want, I’d go from 100% owner to 0% owner with a four year vesting schedule maybe to get back to maybe 35% ownership if the BoD didn’t fire me first, and with their fiduciary responsibility to their LPs they would be highly motivated to fire me before I get much stock vested. And the stock that was vested would be not liquid, and I would have to pay taxes I couldn’t afford. Net, I’d be out the door, have lost my company, and be broke. No thanks.Instead, I’m 100% owner and am darned reluctant to change that. Early in my work, I could have used a little more cash, e.g., for some consultants, say, on installing SQL Server, but I’m past that now.Net, for that deck, without the traction figures, the whole deck is worthless to VCs. With the traction figures, maybe some VCs would like the deck, but, again with the traction, the VC checks are worthless to me. Maybe this is surprising, but very apparently it’s true.Surprising or not, it’s just the way things are in VC land. So be it.So, for my view, all the discussions about how to contact VCs, how many decks to have, what should be in the decks, if should send the decks first or show them the first time at an in face meeting, if should concentrate on a demo, the team, the technology, the vision, the potential, etc. are all just nonsense. Instead, what matters is traction, hopefully earnings, in green $ in the bank, high and growing rapidly. Then as I have read, plenty of VCs will call the entrepreneur and explain how they can help the entrepreneur “go to the next level”, “build out the team”, “help with the go to market challenges”, “make introductions to staff, vendors, and customers”, etc. Maybe they would also help me with my golf swing and success driving a beautiful woman to opera at Lincoln Center in my new Corvette? Would they help me improve the performance of my usage of SQL Server? Hmm …! What about the ideas, applied math, I have for the ad targeting? Could they check the math proofs?

        1. TK

          Since your product is ad based, the key is to get critical mass of users with little or no marketing budget, before you start monetizing. If you can do that without raising outside money, that is great. But you would most likely need some funding – may be angel money initially. But if you have decent proof of product market fit with potential large network of users and decent virality then you should be able to attract VC, from folks like Fred. From what you describe, of your service, you would need to crack the code on distribution (user acquisition problem(- technology is not going to be your issue. All the best. Hope you are successful.

          1. sigmaalgebra

            Some time ago an equity check might have helped: E.g., I could have called for expert consulting on winning at mud wrestling with Windows system management. But, I’ve learned as I went, and there’s some value there, too.History shows that I never really needed an equity check, and I don’t now.There are a lot of Web sites on the Internet, maybe over a million. From my experience, nearly all of them run ads. So, lots of Web sites do run ads. So, lots of Web site founders have found ways to run ads. Maybe I can, too? I suspect so!I’ve heard that there are “ad networks” that work with Web sites to run ads; in this way, a Web site can run ads from large companies by working with ad networks and without ever working much or at all with the large companies directly.There is also the now old example of the Canadian romantic matchmaking Web site Plenty of Fish, long just the sole, solo founder, some old Dell servers, and $10 million a year in revenue all from ads from Google’s ad network. The founder hired some people to have a good staff and then sold out for ~$500 million.So, my plan initially is to get ads from ad networks. I may have to tweak my Web site code to record when my users click on an ad, but I’ll let the ad networks tell me what I have to do on my side. Gee, maybe I’ll have to write some JavaScript; so far I have not written single line of it! I do believe that the ad networks, if they do some simple analysis, will find that initially my users have desirable demographics.Then for your> But if you have decent proof of product market fit with potential large network of users and decent virality then you should be able to attract VC, from folks like Fred.I can believe that. But with what you describe, by then I should have revenue enough not to want, need, or accept an equity check, term sheet, founder vesting, Delaware C-corp, or BoD.My goal is owning a successful business, e.g., owning 100% of an LLC, “Look, Ma, no BoD meetings!”, not selling a big chunk of the ownership of my business and all of the control of my business for an equity check. Again, from all I can see, by the time I can get a VC equity check, I’ll no longer need, want, or accept it. Much of the reason for this is that my burn rate is so low.Why so low? Well, I am a sole, solo founder, have done all the technical work without hiring anyone, not even consultants or consulting, no longer even buy computer books, and have a development computer that with my software is good enough also for early usage, say, one user a minute.Next, now $2000 in parts, maybe only $1000, will let me build one heck of a Web server for my software, say, support one user a second.For more, there’s a lot of good software available for free. E.g., the Microsoft Bizspark program will let me have serious, stable production versions of all their software I can use for free.I don’t need much data rate to the Internet because my largest Web page sends for only 400,000 bits. Last time I checked, from my ISP, my default upload data rate was 26.48 Mbps. So, half filling that 24 x 7, my ballpark, first-cut, back of the envelope estimate is that the monthly revenue would be $857,952. Okay, maybe that’s too high by a factor of 10. So, make the estimate $85,000 a month. That’s still plenty of cash for more servers each with $2000 in parts. Ah, to heck with the 10; call that too high by 100; that’s still $8,500 a month in revenue for more in servers.For more, for several such servers, my server farm and software architecture are plenty scalable.For more servers, I’ll take an upstairs, back corner spare bedroom, hire an electrician to increase the house main circuit breaker from 100 A to 200 A and put a 100 A circuit breaker box in that bedroom, install a window unit A/C, get some of the $100 wire rack shelf units from Sam’s Club, put some UPS units on them, have a backup electric generator on a pad out back (for the whole house, say, 10 KW), get a good Cisco router including for both security and Web server load leveling, and put several servers on the wire racks. That should be computing enough to take me to $10 million a year in revenue. Then I’ll go get a real office with space in the back for a bigger server farm, hire an office manager, and start to grow staff.In one of his many essays, Paul Graham wrote:There are only two things you have to know about business: build something users love, and make more than you spend. If you get these two right, you’ll be ahead of most startups. You can figure out the rest as you go.You may not at first make more than you spend, but as long as the gap is closing fast enough you’ll be ok. If you start out underfunded, it will at least encourage a habit of frugality. The less you spend, the easier it is to make more than you spend. Fortunately, it can be very cheap to launch a Web-based application. Well, for this advice, I have a low burn rate.As you wrote:> If you can do that without raising outside money, that is great.Yup.> Since your product is ad based, the key is to get critical mass of users with little or no marketing budget, before you start monetizing.I can see that if Kia or Mitsubishi want to sell a new, high end SUV in the US market right away, then they will need a big marketing campaign and budget.For Web sites, IIRC the last big effort at a marketing effort was some Superbowl ad with or for some sock puppet which was seen as a big waste of money and a bad joke.As I look at growth of Web sites, I don’t see much role for marketing money.I can understand the roles of publicity and viral growth and have collected lots of discussions of those. One old remark about news reporters might be correct: “You want your story told, and I desperately want a story to tell.”. There may be situations like that. Well, I’ve got a story to tell. The news reporters I’ve contacted seem just to be waiting until I have enough visible to have a good story for them to tell. I’m still collecting ideas for early growth in usage.> But you would most likely need some funding – may be angel money initially.I’m not seeing the need for such funds. I have plenty of funds for contacting reporters via phone and e-mail.For making a video of usage of my site, say, as a super fast tutorial, there are some software tools I can use for that. I might be able to upload the video to YouTube and then send news reporters the URL of the video.For getting a booth at a trade show, if the trade show is for owners of convenience stores and if I’m selling some nice new display racks for convenience stores, then maybe a booth would be worthwhile.But, to me for my startup, or, really, for nearly any Web site startup for a general audience, a trade show booth doesn’t look like a very good use of money.For more than publicity via the news and virality, maybe if I think a little I’ll be able to stir up a “hack” of the publicity world or some clever guerrilla marketing effort.Yes, my Web site might go live and just sit there with no users. I know that. But I also know that lots of new things do catch on and grow, nearly explosively. E.g., Ford’s Model T might have just sat there in the showrooms, but it didn’t and, instead, in about 10 years put a lot of horses out of work. And there were no Superbowl ads! Maybe the teenagers would have just ignored Snapchat, but they didn’t; instead, lots of teenage girls did imprudent things. Facebook caught on, like a match to a billion gallons of gasoline on the ground.From all I can see, my Web site is the first good, and an excellent, solution to a problem plenty serious for nearly every user of the Internet in the world.The situation is a little like the Model T: People could see that a horse was a total pain of a way to get the family to the county seat on Saturday. If get kicked by the horse, it was an even worse total pain. They could wish for something better than a horse. But their wishes came to nothing because they could see no obvious solution. E.g., right away they saw that they weren’t going to get “a faster horse”. They didn’t think to ask for a Model T. So, they didn’t ask for anything.For my work, again, all the Internet users are using horses, need something better, can’t think of anything better, and I have something better, a Model T. And with just horses, there are lots of trips they are not taking that with a Model T they would. It’s a case of the old story: “It’d be silly to build a bridge across the river here. Obviously there’s no traffic across the river here.” Yup, but there’s no bridge, either. So, can’t use just current traffic to estimate the potential traffic. Generally, with better tools, the Internet will get more usage.There’s an old remark from mathematician Richard Bellman, IIRC,We often find that a good question is more important than a good answer. Then along these lines, from Paul Graham there is:As in science, the hard part is not answering questions but asking them: the hard part is seeing something new that users lack.The better you understand them the better the odds of doing that.That’s why so many successful startups make something the founders needed. Yup, Henry Ford saw “something new that users” lacked. So did I.For the “make something the founders needed”, I’ve done that: I started with a need I wanted satisfied, saw no solution from anyone else, saw that essentially everyone on the Internet had the same problem, so started cooking up a good solution for both myself and everyone else. I’m eager to use my site myself!Maybe people will hear about my solution, get curious, try it, sometimes get involved, use my site, and tell others. Maybe. Apparently that’s the main way popular Web sites, aps, etc. grow.I’ll keep thinking about early publicity and virality.But to do much more on publicity, etc., first I need to get the site, as I envision it, live on the Internet.The code, good for at least early production, is essentially ready: It was live and working apparently perfectly on my development computer before I got a system management disaster from some boot partition data corruption from an intermittent, temperature sensitive motherboard hardware problem; just a standard part of reality. I’m reinstalling all the software on that boot partition; it’s a lot of software and a lot of work; that I can post this message now means that I’ve made a lot of progress on the rebuilding.I need to add some data, finish an alpha test, likely tweak the code, UI/UX a little, do a beta test, and be ready to go live for, say, one user a minute.For such progress, the main bottleneck just now is low level, down and dirty, routine, system management mud wrestling with some of Microsoft’s software.Other work is fully expected, routine, and trivial — get a static IP address, get a domain name, register a trademark, get a business bank account, get a tax ID, tell my county that I’m “in business as”, etc.> From what you describe, of your service, you would need to crack the code on distribution (user acquisition problem(- technology is not going to be your issue.On cracking the “code”, apparently the main Paul Graham advice, and along with some less public advice, is at…withBuild something users love, and spend less than you make. For the second part, spending less than I make, the revenue estimates above and my low burn rate help with that.For the first part, about “love”, Graham went on with:Better to make a few users love you than a lot ambivalent. Ideally you want to make large numbers of users love you, but you can’t expect to hit that right away.Initially you have to choose between satisfying all the needs of a subset of potential users, or satisfying a subset of the needs of all potential users. Take the first. It’s easier to expand userwise than satisfactionwise. So, for this advice, I do believe that some users will really love my site!So, according to Graham, that “love” may be enough tocrack the code on distribution But, I’m looking for more!

  20. ShanaC

    have you seen anyone use a presentation as a jumping off point for a conversation?

    1. fredwilson

      yes, very commonbut not easy to figure out how to get out of presentation mode and into conversation mode unless the audience takes you there

  21. george

    Funny thing, I find that a really simple, short-form deck (the roadmap) to be extremely valuable; it helps direct the conversation (the story) thoughtfully. By the end, I ask myself, can I imagine this idea/product really something people would fall in love with or does this product really, really matter (measurably better than anything else).

  22. Pankaj Garg

    I used to send the decks in advance for the context. The meetings were always discussions.

  23. Vasu Prathipati

    Would you have a moment to share the core elements / attributes of the conversation that make one meeting that much better than another?

  24. Vinish Garg

    The key is to use that can stay in others’ minds longer, and for right kind of impact. If visuals are important for pitching, a deck certainly helps. Likewise, if the narrative is important, the deck may not be required.

  25. Ellen Prinzi

    I couldn’t agree more. As a founder it allows you to show off your passion and true self, not a scripted version aided by a deck.

  26. Gregg Freishtat

    I always know a pitch went well when the time flies by and we are wrapping up and I notice the cover slide is still up…..

  27. Nathan Beckord

    Whenever I start a pitch, the first thing I ask after the formalities is, “How do you like to do these? We can chat about what we’re up to, or we can go through the slides, or we can do a demo. What do you prefer?”Giving 3 options allows the investor to pick the format he/she prefers to receive information, and I can tailor the story accordingly.Some folks are conversational, others are product junkies, and many (most?) like the structure of a deck.Personally, I love it when the investor chooses “have a conversation” because it’s easier for me to “freestyle it” than follow a script and as a result, the passion comes through stronger.

  28. Nir Z. Pengas

    Having a conversation and engage in a story makes the process more creative, I enjoy this. Plus sometimes the entrepreneur is nervous because of the deck and the flow and blabla. When I can I prefer to take that person for a walk and just talk. I find that to allow for a greater connection, allowing the other person to be more comfortable and to see who they are in a more natural and real for them. I’m off a tangent I realize now as I write it. Haha.

  29. TJ Abood

    I like this approach, as long as the conversation is accompanied with a presentation before/after for review.To expand upon your final comment, this approach illustrates the confidence of the founder. The pressure going into a pitch can be debilitating, as founders try to anticipate every question they may get. The conversational approach signals complete comfort with the business, it’s market, and it’s value to customers and investors alike, etc.

  30. Hurstral Foollo Geze

    And as the winter approaches we will grow the same business we all like to do.

  31. lunarmobiscuit

    Stories are powerful. Fred, from your description, I’m expecting that these meetings are at least starting out with a verbal story, which then evolves into a back-and-forth conversation.What I’m now teaching at my accelerator is that pitching is nice, but stories are better. Aim for a TED talk rather than a Kawasaki 10-slide deck. Write the story first, adding only as much in slides as needed to help the audience visualize the details. Don’t touch PowerPoint at all until after the story is formed.That is backwards from how most every pitch is created, and the results are far more compelling. See… for the “Best of” this process.And before you say, “but that isn’t a conversation,” the reality is that once you can do a great 5-minute TED talk, you can easily grab elements of that story to weave into a casual conversation about your startup, without those memorized pieces sounding like scripted slide talk-tracks, as they are not scripts, but old fashion storytelling at its best.