Successful founding and financing of nanotechnology companies

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6) How do I pitch my idea to a venture capital investor?

Venture capital investors will look to see that the management team brings the personal characteristics and professional qualifications needed to successfully drive the company forward from start-up all the way through to future market leadership. They will expect to see professionalism, focus and certain capabilities. In addition to technical expertise, they will be looking for teamwork and organizational skills, an awareness of expense control, the ability to manage people, and ideally some experience in marketing and finance. A track record in working with external partners is also valued highly.
It is therefore essential that you start by formulating a compelling case for your business strategy, and expressing it in crystal-clear terms. Practice your presentation skills, preferably before an audience that is not entirely from your own industry. You should actively solicit constructive criticism and suggestions for improvement. In a maximum of 30 minutes and 10 slides, you should be able to convey a good understanding of - and create enthusiasm for - your business model. You should also be prepared to do this if you only have 15 minutes. Convince your audience with a very short but lucid explanation of your technology and a well-thought-out business plan. Make it clear that you understand what it takes, and that you are willing to work very long hours seven days a week toward your ultimate success. Venture capital investors place a great deal of weight on the personal suitability and drive of the management team, and this is often the deciding factor in whether or not to invest.
Practical tip: Practice your presentation in front of an audience, and make sure they ask tough questions at the end! Even during your initial presentation, it is not unusual for venture capital investors to test you with basic questions such as:
  • "Why should we invest in your company?"
  • "Why do you think that the market will buy your product?"
  • "At what point will you be able to turn a profit?"
  • Give answers which are convincing but not overly complicated. Keep it short and to the point.