WISE GUY
BY G U Y KAWASAKI
GO FORTHE GOLD
FOLLOW THESE l O STEPS TO IMPRESSING INVESTORS, AND YOU'LL BE ON YOUR WAY TO THE BIG TIME.
U5T MONTH I told you what not to do if you're try-
ing to get venture capital. Here are the top lo things
you should do.
l.DUtLDAREALBUsmess. This seems like a "dub"ism.
but few entrepreneurs do it. Most focus on quick
flips to an IPO or acquisition. But nothing is more
seductive to venture capitalists than a company they
can easily imagine having a big impact on the world.
2. GET AN INTRO. Venture capitalists are lazy. We want
things handed to us on a silver platter, like wben
someone we know and trust tells us ahout a good
deal. The best introductions come from corporate
finance attorneys, college professors and CEOs of
companies in our portfolio.
3. DBEYTHE 10/20/30 RULE. Your PowerPoint pres-
entation should have approximately lo slides, you
should be able to give this presentation in 20 min-
utes and the smallest font should he 30 points. And
yes, this me:ms you with the patent-pending, curve-
jumping, open-source, Google AdWords-optimized
way to sell dog food online.
20 ENTHEPRENEUB APRIL 200?
4. SHOW TRACTION. The easiest way to prove you
have a real business is to be generating revenue.
It's one thing to believe your bull-shiitake Power-
Point presentation; it's another to see cash flow-
ing into your company. Sbow traction, and most
venture capitalists will be willing to suspend
their disbelief.
5. CLEAN UP YOUR ACT. Remember, venture capitalists
are lazy, so present a clean deal. Clean means
no lawsuits challenging your ownership, no
shifty stock deals, no disgruntled co-founders
lurking in the background. The more crap
f 18% ^
I of entrepreneurs
a venture capitalist has to clean up. the less J admit lo checking
likely he'll he interested in your deal. ^ their work-related
6. DISCLOSE EVERYTHING. Tf you have crap you j e-mail in
I the bathfoom.
can't clean up, then disclose it right away—
not necessarily in the first meeting, hut soon
thereafter. Tbe worst thing you can do to venture
capitalists is surprise ihem with had news.
7. ACKNOWLEDGE, DR CREATE, AN ENEMY. V e n t u r e C a p i -
talists like to see competition—it validates that
a market exists.
B. TELL NEW LIES. Please refer to last month's column.
Hver>' time you tell one of those lies, you decrease
tbe likelihood of funding by 25 percent. Do the
math: Tell four lies, and you won't get funding.
9. DON'T FALL FOR TRICK OUESTIDNS. Venture Capital-
ists use two trick questions to assess your clue-
lessness: 1) Do you see yourself as the long-term
CEO of this company? and 2) What is the liquid-
ity path for your company? The right answer for
the first one is, "My goal is to build a great com-
pany. If it means I need to step aside, I will gladly
do so when the time is right." The right answer
for tbe second one is, "Frankly, I haven't given a
lot of thought to liquidity. My team and I are fo-
cusing on tbe product. If we build a great com-
pany, I'm confident liquidity will occur."
lO.UNDERPROMisE ANDDVEROELivER. In everything
you say, ensure that your results exceed expec-
tations. Deliver a prototype early. Deliver your
list of references early. Close a partnership deal
early. The only thing you shouldn't do earlier than
expected is run out of money.
GUY KAWASAKI'S mantra 's "Empower entrepreneurs "He is former chief
evangeiistpr Appie Inc., co-founder ofVCprm Garage Technology Ventures
and author of eight books—rrost recently The Art ofthe Start V/siI hii
blog at http://blog.guykawasaki.com.