How to Present to Investors | Hacker News Reader

How to Present to Investors

sequoiacap.com

75 pointsgerad21 comments

Great advice - investors see so many deals and believe in the perfect market hypothesis. They need to know what changed to break their default cynicism.

Note it's different from their advice on business plans / decks: http://www.sequoiacap.com/grove/posts/6bzx-writing-a-busines...

The link above basically says: purpose, problem, solution, why now...

The article today says: why now, solution, facts

I like the "What's changed" bit too.

The other good thing is the James Bond analogy. My eyes glaze over on any presentation that doesn't tell me the punchline in 5 minutes, and VCs see a lot more of them than me.

After going through a bunch of their other articles, seems like its a bad idea of sequoia to do something like this.

Most of their entrepreneurs will suffer from a selection bias for obvious reasons. Almost every article does a shoddy job decoupling correlation from causation like this one.

Can you elaborate a bit ore there? what context are you referring to regarding correlation/causation?

Good advice - but did twitter solve a "pain point"? Did Facebook? Sometimes you crate a market vs. solving a problem.

"Fun" is probably not a painpoint, good catch, and this is one reason why the above examples caught on.

It appears that Sequoia's new Grove system doesn't allow user commenting. Which is somewhat of a shame, as it makes the posts very one-sided and unopen to debate, which is what appears to be happening here in the HN comments.

Most likely Sequoia wants debate on its pages as much as Disney wants protests in its theme parks. Hosting constructive debate takes additional effort, so it is a valid choice. Those looking for places to debate VC fundraising and other topics have other places to go, like Fred Wilson's blog avc.com, Union Square Ventures (usv.com), and of course here, among other places.

What about the comments here do you think is useful to them? The orignal post was about how to deliver a useful presentation, presumably to them but probably to a more general audience, but the comments here appear to go off on a tangent about selection bias.

I'm the editor of Grove. First, thanks for checking it out and for talking about it here. Our initial goal was to create some compelling pieces that the entrepreneur community would find helpful. To that end, we took the advice we got from the founders we worked with to build the site, which is launch and improve over time. The ability to comment is certainly one of the things we'd like to add going forward, but we feel we have to earn the right to be a community site first. We're hosting a drinkup next month, which hopefully will be a start. In the meantime, forums like HN where there is already a big community are a great place to discuss the site.

FYI here's a link to the drinkup: https://sequoia.co1.qualtrics.com/SE/?SID=SV_dpzD7CVJ0DtTwgd

Aw c'mon, it's the internet! You don't need to "earn the right to be a community site". You just swagger on in, set up comments, filter the spam, and see if enough others show up to make a flamewar. :) Sink or swim, just like a startup!

(That said, I totally understand getting content rolling before adding comments)

Too boilerplate to be worth anything. Bet exactly zero companies got funded this way.

I found this bit pretty insightful:

"At this point, the first 5 minutes are almost up and there’s just time to run through an agenda slide, which covers all the usual ground (e.g., product, market size, team, etc).

"From here, many entrepreneurs roll right on to tell the story in greater detail. But your 5 minutes are up, and we suggest you pause and check in with your listeners. Most likely, they have seen businesses in the past which they think are similar. Maybe they have some biases based on prior experience in a similar market. It’s best to flush those out early so you can address them as you go through your presentation. So after laying out the agenda, we like to ask the investors whether there are any particular areas of concern or questions we should be sure to address.

If its good business the right investors will poke 'through' your presentation to find the right answers. No good investor will skip on a break-through business because of a shoddy presentation.

It might seem that from the authors prose that they belive that their presentation skills got them funding - which is why this is all wrong and sends exactly the wrong message out. Most first time entrepreneurs who raise funding can't stop gushing how they were able to convince investors - the root cause is very rarely that simple. Fund raising is not about 'convincing' anyone - it can almost never be done - more often than not its more about 'discovering' the right investors and your ppt has no role to play.

Sometimes people misrepresent themselves in a presentation. The explanation wasn't clear or they've described themselves as something that they're not. That can turn anyone away if the alternate interpretation is something that the investor has seen many times and have known not to work.

This, coupled with the fact that almost all ideas are either iteration, combination or derivation of other ideas makes it quite a frequent occurrence if not careful.

I don't think our presentation skills got us funded. But I do think our ability to persuade investors, recruits, partners etc to work with us -- even though we had no relevant experience -- was critical to our success. To do that, you have to communicate with your audience in a compelling way. Everyone has their own style and way of doing it. I'm just sharing what worked for me.

I am sure you guys are super smart and persuasion skills to match. The point that I am trying to make is that, maybe so are a lot from the other 99.9% of entrepreneurs who did not get funded by sequoia.

The lines of causation that we hold dear to us most of our professional lives somehow break down when we talk about startups. Maybe the simple reason that you got funded was that one of the partners thought that your market is going to be big (because of his specific personal background) and you were just another good team which just happened to focus on the exact same market - maybe also because of one of your founders background.

I understand sequoia motivation to start something like this. Even though they have a clear vested interest, I would like to believe that this was born out of an altruistic pursuit. The entrepreneurs though, are best served to take all this advise with bucketloads of salt.

All advice should be taken with a bucketload of salt (Limited life experiences + Over-generalization = Advice -- Paul Buchheit).

That doesn't mean advice is pointless though.

Good presentation == good communication. If you can't communicate your idea simply and succinctly, you'll have a tough time raising rounds.

This is precisely why YC only allots 10 minutes per interview. It forces founders to hone their message and prep with quick fire answers to important questions regarding viability and scalability.

I think the most compelling point about the article is the emphasis on stacking your cards for the first 5 minutes.

I've seen many entrepreneurs approach pitching like a rolling boulder, where they think they gain momentum as more time goes on. More often than not, this isn't the case.

I agree. It's kind of like interviewing a candidate. Typically you know in the first five minutes if they're going to work out or not. Put your good stuff up front. I'm not convinced most investors are necessarily going to be able to "tease out" that your company is great.

Of course, take this with a grain of salt, as I haven't raised a round yet (we haven't yet started). Even when I do, a sampling size of one is hardly empirical evidence either way.

I think you are wrong. The entrepreneurs that intuitively knew this, without reading a blog post about it, were the ones that also got funded.

So hopefully others that don't know this, can adjust their behavior, and possibly have a chance at getting funded.

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