"It's the most beautiful place in the world," he said, entertaining a rapt TechRaising audience of 50 Thursday night at NextSpace, while delivering punchlines amongst his strategies for pitching venture capitalists.
"I'm a VC anthropologist, I've seen them in their native habitat," Risley said, explaining venture capitalists want to change the world and get a big return working 30 hours a week.
"They don't want to control your business. That's a disaster scenario for a venture capitalist. They live an overpaid life. If they control your business, they have to think about it all the time," he said.
His advice: "Don't give them a business plan. They won't read it. To be duly diligent, they have to read it. They'll be paralyzed and they won't invest."
Work backward: "Start by writing your press release on the big announcement. Then work your way back."
Risley said Defense.net, a security startup with
Yet misfires have been plenty.
Bessemer turned down a startup to sell stamps, coins and comic books online.
In 1998, he heard
Risley, thinking of
In 2005, Risley said no to a pitch to put instant messages together and Bessemer declined the deal. Use of the new service doubled every week for nine weeks, embraced by students and soldiers. After seven years, Meebo was sold to
"It almost doesn't matter if you can explain it, but if the graph goes like this," said Risley, pointing to a chart showing Meebo's escalation, "You can raise the money."
Venture capitalists are awash in money they get from pension funds, insurance companies, university endowments and wealthy families who become limited partners.
Bessemer got its start when
The solution is to ask: "Am I addressing the biggest opportunity?"
Venture capitalists won't drive
"Maximizing the opportunity" and "addressing the pain" resonated with
Hiring the best talent, as Risley advised, can be a double-edged sword, noted
"If the most important thing is money, they're probably the wrong person," observed
Must-haves for VC pitch
--Who are you?
--How big is the market? Must be
--Why is it in pain? What itch do you scratch?
--Why the current solutions aren't working: Usually it's lousy user experience
--How does your solution improve the consumer experience?
--Who is the team?
--What proof do you have? Demos, testimonials
--How will you sell? Or will you give your product away?
--Do you have a matrix of you and your competition showing you in the upper righthand corner?
--How fast can this grow?
--Financials: Revenue, expenses, starting cash, cash balance by quarters for three years
--Why are you the right team?
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