Advice for Entrepreneurs from the Ladies of MDV

Original entry: April 24, 2009

The sleek,  spacious offices of Mohr Davidow Ventures in leafy Menlo Park was the site of this week’s Girls in Tech event, “Meet the Thought Leaders of the Venture Capital Community”.   The ladies of MDV, Rowan Chapman (Life Sciences),  Katherine Barr (IT) andMarianne Wu (CleanTech) shared their personal experiences and insights as they gave us a peak into the world of venture capital.  I’ve captured their advice for entrepreneurs below.

The panelists analyze four main categories when looking at new companies to add to their portfolio:
1.  Market Risk (Is it a big market? Is the right timing?)
2.  Financial Risk (How much money is required to get the company to the next stage? How much total capital is required?)
3.  Technology Risk (How difficult is it to develop?)
4.  People Risk (Why this entrepreneur? What makes them special?)

The panelists advised entrepreneurs against making these common mistakes:
1.  Don’t come across as arrogant (arrogance works for some but not for most)
2.  Don’t duck questions or come ill-prepared to answer questions.
3.  Don’t assume the VC knows your space as well as you do. Raise the level of understanding so that your value prop is easily understood by non-subject matter experts.
4.  Don’t include an exit slide. Concentrate on how you are going to build a great company, not on how you plan to cash out.
5.  Don’t exaggerate.  VCs normally spend 1-3 months doing due diligence before investing. They’ll know if you exaggerate, and you’ll lose credibility.

Our panelists emphasized following these tips for success:
1. Think big or go home. VCs are looking for visionary entrepreneurs who will change the market landscape.
2. Get a warm introduction to the VC  — It’s all about relationships!
3. A 20-page slide deck is much preferred to a 50-page business plan.
4. Capture interest in the first 5-10 minutes. You may have an hour to present, but the first 5-10 minutes are the most important.

A big thank you to the phenomenal ladies of MDV for generously sharing their time, experiences, and advice with us!

If there’s anything I’ve left out of this post that you think is important to add, I welcome your comments.