Quick VC pitch tip #7

by Healy Jones

Another silly little tip for the entrepreneur pitching venture capitalists:

VC Pitch Tip #7 - Format your financial model for printing

If you send a copy of your financial model in Excel to a VC make sure that at least the summary page(s) are formatted to print. I realize this probably sounds a bit stupid - after all, you are trying to get funding to grow a business, not win any awards for Microsoft Excel skills. But you need to keep in mind how the VC is likely to see/use the model. Often the model is simply opened up from the email and printed… by an assistant...... and handed to the venture capitalist as they are walking into the meeting with you. At this point the VC will look at the model and think "man, this entrepreneur has no idea how to project their startup's cash needs."

Does this sound far fetched? It happened to me last week. I walked into a meeting with a several of my fund's partners and an entrepreneur. A couple of days before the meeting the entrepreneur had emailed his financial model (and his investors’ deck) to the partner and his partner's assistant - so far a smart move. The partner had looked at both on his computer and asked his assistant to print them for the other VCs who were joining the meeting. At some point the discussion turned to the amount of capital to be used by the business and use of proceeds. We all picked up the printed financial model, which had exploded to about 40 pages each because it was not formatted to print (also a total waste of paper.) Single columns of numbers dominated about half of these pages. It was pretty much indecipherable, but took the entrepreneur a few minutes to realize the amount of confusion that had developed from the formatting error. By the time the CEO tried to pull the model up on the projector one of the partners declared that the entrepreneur didn't seem to have a good grasp on the company's cash needs. 

This was pretty unfair because the entrepreneur had done a good job building the model; it just wasn't formatted to print. However, for most of the partners in the meeting this was the first they had seen of the company's projections. Now the entrepreneur and the partner who had spent time with the company had to defend the projections and the competence of the CEO, not talk about the strategic implications of the company's spending plans. This was a useless distraction that could have easily been avoided.

So, a simple VC pitch tip - when sharing your financial model (or pretty much anything) with a VC assume that it may be printed by the VC's assistant. Format it so that it looks good on the computer and on a piece of paper.