I am a serial entrepreneur turned serial investor.

And by the use of pitching PowerPoints to VCs,

I have personally raised tens of millions of dollars

from VCs through PowerPoint pitches.

And then, turning round to the other side of the equation,

I have personally supervised the investment

of tens of millions of dollars into companies

who have been pitching me with PowerPoint presentations.

So I think it's safe to say I know a little bit

about the process of pitching.

So, the very first question that you've all got to figure out

is: what is the single most important thing

that a VC is looking for when you come to them

pitching your new business idea?

And there are obviously all kinds of things.

There are business models, and there are financials,

and there are markets

and there is that. Overall, of all the things that you have to do,

what is the single most important thing the VC

is going to be investing in?

Somebody? What?

(Audience: People.)

David S. Rose: People? You! That's it -- you are the person.

And so therefore, the entire purpose of a VC pitch

is to convince them that you are the entrepreneur

in whom they are going to invest their money

and make a lot of money in return.

Now, how do you do this?

You can't just walk up and say, you know,

"Hi, I'm a really good guy, and a good girl,

and you should really invest in me." Right?

So, in the course of your VC pitch, you have a very few minutes,

and most VC pitches --

most angel pitches are about 15 minutes,

most VC pitches should be less than half an hour.

People's attention span after 18 minutes begins to drop off,

tests have shown.

So in that 18 minutes, or 10 minutes, or five minutes,

you have to convey a whole bunch of different characteristics.

You actually have to convey about 10 different characteristics

while you're standing up there.

What's the single most important thing you've got to convey?

What?

(Audience: Integrity.)

DSR: Boy, oh boy, oh boy! And that's a straight line we got

right over there. And I didn't even prompt him.

You're right, integrity. Because that's the key thing.

I would much rather invest in somebody -- you know,

take a chance on somebody -- who I know is straight

than somebody where there's any possible question

of, you know, who are they looking out for,

and what's going on.

So the most important thing is integrity.

And what's the second most important thing after integrity?

Let's see if you can get this one.

(Audience: Self-confidence.)

DSR: Close enough! Passion.

Right, so here you want --

entrepreneurs by definition are people

who are leaving something else, starting a new world over here,

creating and putting their lifeblood into this kind of thing.

You've got to convey passion.

If you're not passionate about your own company,

why on Earth should anyone else be passionate?

Why should they put more money into your company,

if you're not passionate about it?

So, integrity and passion: the single most important things out there.

Then there are a whole panoply of other things

that you've got to do, to wrap up in this package

that you're presenting to a VC.

Experience.

You've got to be able to say, "Hey, you know, I've done this before."

And "done this before" is starting an enterprise and creating value,

and taking something from beginning to end.

So that's why VCs love to fund serial entrepreneurs.

Because even if you didn't do it right the first time,

you've learned the lessons, which are going to

stand you in very good stead the next time.

And now along with that, along with the experience

of starting an enterprise, or running something --

and it doesn't have to be a business.

It can be in an organization at school,

it can be a not-for-profit.

But they want experience in creating an organization.

Next up is knowledge.

If you're telling me you're going to be

the great developer of the map of the human genome,

you'd better know what a human genome is.

I mean, I want you to have domain expertise.

So I don't want somebody who's saying,

"Hey, I've got a great idea in a business I know nothing about.

I don't know who the players are.

I don't know what the market is like."

So you've got to know your market.

You've got to know your area.

And then you have to have the skills that it takes

to get a company going.

And those skills include everything from technical skills,

if it's a technology business, to marketing, and sales,

and management, and so on.

But, you know, not everybody has all these skills.

There are very few people who have the full set of skills

that it takes to run a company.

So what else do you require?

Well, leadership.

You've got to be able to convince us

that you either have developed a team

that has all those factors in it, or else you can.

And you have the charisma and the management style

and the ability to get people to follow your lead,

to inspire them, to motivate them to be part of your team.

All right, then, having done all that,

what else do I want to know as a VC?

I want to know that you have commitment.

That you are going to be here to the end.

I want you to say, or I want you to convey,

that you are going to die if you have to, with your very last breath,

with your fingernails scratching as they drag you out.

You're going to keep my money alive

and you're going to make more money out of it.

So I don't want somebody who's going to cut and run

at the first opportunity.

Because bad things happen.

There's never been an angel- or a venture-funded company

where bad things didn't happen.

So I want to know that you're committed to be there

to the very end.

You've got to have vision.

You've got to be able to see where this is going.

I don't want another "me too" product.

I want somebody who knows, who can change the world out there.

But on top of that, I also need realism.

Because I need to know that you know that

while changing the world is great, it doesn't always happen.

And before you get to change the world,

bad things are going to take place.

And you've got to be able to deal with that.

And you have to have rational projections and stuff.

And then finally, you're asking for my money,

not just because it's my money, but because it's me.

You need to be coachable.

So I need to know that you have the ability to listen.

We've had a lot of experience.

People who are VCs or angels investing in you

have had experience and they'd like to know

that you want to hear that experience.

Okay, so how do you convey all these 10 things in 10 minutes

without saying any more?

You can't say, "Hey, I've got high integrity,

invest in me!" Right?

You've got to do a whole pitch that conveys this

without conveying it.

So think about your pitch as a timeline.

It starts off, you walk in the door.

They know nothing at all, whatsoever, about you.

And you can take them on an emotional --

all pitches, or all sales presentations, are emotional at some level.

You can go up, you can go down, right?

And it goes from beginning to end.

You walk in the door. So the first thing you've got to do --

the overall, you know, arc of your presentation --

it's got to start like a rocket.

You've got maybe 10 seconds -- between 10 and 30 seconds,

depending on how long the pitch is -- to get their attention.

In my case, "I've invested. I have got tens of millions of dollars

from PowerPoint pitches.

I have invested tens of millions of dollars."

That's it -- that should get you right there.

This can be a factor, and everybody can be saying

it's counterintuitive. It can be a story, it can be experience.

But you've got to grab their emotional attention, focused on you,

within that first few seconds.

And then from there, you've got to take them

on a very solid, steady, upward path, right from beginning to end.

And everything has got to be reinforcing this.

And you've got to get better, and better, and better, and better.

And it's revving up to the very end,

and then at the very end you've got to -- boom! --

knock them out of the park.

You want to be able to get them to such an emotional high

that they are ready to write you a check, throw money at you,

right there before you leave.

Okay, so how do you do that?

Well, first of all, logical progression.

Any time you go backwards, any time you skip a step --

imagine walking up a staircase where some of the treads are missing,

or the heights are different heights.

You stop, you've got to figure it out.

You want a nice logical progression.

Start with telling them what the market is.

Why are you going to do X, Y or Z.

And then you've got to tell me how you're going to do it,

and what it is you're going to do. How you're going to do it.

And the whole -- it's got to flow from beginning to end.

You've also got to let me know that there are touchstones.

You want to tie in to the rest of the world out there.

So, for example,

if you reference companies I've heard of,

or basic items in your business,

I want to know about them. Things that I can relate to:

validators, or anything that tells me somebody else has approved this,

or there's outside validation.

It can be sales; it can be you've got an award for something;

it can be, people have done it before;

it can be your beta tests are going great.

Whatever. I want to know validation,

that you're telling me not just what you're telling me,

but that somebody else -- or something else out there --

says this makes sense.

And then, because I'm looking for the upside here,

I've got to have believable upside.

And that's two parts.

It's got to be upside, and it's got to be believable.

The upside means that if you're telling me that you're going

to be out there, five years out, making a million dollars a year --

hmm. That's not really upside.

Telling me you're going to be out there making a billion dollars a year --

that's not believable.

So it's got to be both sides.

On the other hand, there are a lot of things that drive me down,

take the emotional level down,

and you've got to recover from those.

And those, for example, are anything you tell me

that I know is not true.

"We have no competition. There's nobody else

who's ever made a widget like this."

Odds are I probably know somebody who has made a widget.

And the minute you tell me that -- boom! You know,

I discount half of what you're saying from then on.

Anything that makes me think. Anything that I don't understand,

where I have to make the leap myself, in my own head,

is going to stop the flow of the presentation.