On facing the money people
I wish I could tell you that one of the companies I'm involved with now is about to face a battery of angels and VCs, but I can't. None of them are that far along. But I want to tell you a story of one such visit -- before the Pennsylvania Private Investors Group (which appears to have had its Web site taken down) -- that took place when I was involved with GreyPilgrim, Inc. Maybe this story will help you.If you want to address a group of money people, and tell them about your business, you have to pay for the privilege of the group deciding whether you're worthy. This is not unlike paying to take an exam which, if you pass, will allow you not to take an otherwise required undergraduate course. Circa 1997, the PPIG was charging $150 to review business plans. Since they agreed to have us address them, the partners felt the $150 was well-spent. But the other partners agonized over this pitch for several weeks, and I decided that since so much effort went into it, I'd better tag along and see what was up with that. Even though the partners weren't going to let me actually TALK during the pitch. They said that since I was an engineer, and that I was likely to (a) tell the truth as I saw it and (b) put everyone to sleep with technobabble, I'd better sit in the background.
The meeting was held in a nice hotel, and coffee and muffins were amply available. I couldn't have a muffin, even though I'd missed breakfast -- we couldn't take the chance that one of the high-rollers would think I had bad table manners and decide not to invest in us for it. We were pretty sensitive to those kinds of things.
Another small company, which had developed an "expert system" to activate alarms in chemical and power plants in the event of an accident, presented ahead of us, and we had a chance to learn from them. (This group was inspired by the famous Union Carbide Bhopal accident, as I was when I wrote the sci.engr.* FAQ on Failures. They took a response manual used by Dow Chemical to determine triggers and responses for alarms, and automated the manual. Then they added customer suggestions to the knowledge base, and made an intuitive graphical user interface. It really was sweet. And they'd set up copies of this software at HUGE companies like Dow, Dupont, etc. -- but they hadn't SOLD any yet. That was baffling to me, and baffling to the money people listening in, too.
And it didn't bode well for us, either, because software generally requires less of a buyer commitment than robot arms.
Well, as it happened, our presentation went "very well." I used to scream when the partners would use that phrase, "very well," about how something was going. It drove me crazy, because it was undefined. And it never meant we'd made some money. So I tended not to believe them. My job, as the engineer, was to be the Voice of Reason, making impartial observations. And the Voice of Reason also got to flip the viewgraphs. Afterwards, we found ourselves surrounded by half a dozen old tycoons, asking questions and watching our videotape for nearly half an hour. They'd told us they'd never seen such enthusiasm. I never saw it either: we didn't get a dime of investment money.
Anyway, the Voice of Reason will now tell you what it means to feel "very well" in this context:
- you really do feel good when it's over
- you take a significant amount of time to answer questions, and you CAN answer them (in this case, they even let ME answer a couple of them)
- you collect numerous business cards (and with any luck, a commitment from a couple of guys to call you at a later date)
Labels: rhetoric
posted by Ron @ 10:37 PM
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