The dos and don'ts of pitching for business investment

By Ian Rose
Business reporter

image copyrightThinkstock

Each year venture capitalists and seed investors pour billions into businesses in the hope one day they will bag a winner.

Creating big, sustainable, and highly profitable ventures is every investor's dream.

But getting you and your business in front of these wannabe billionaires - let alone being given the green light - isn't easy.

So we spoke to three different and influential investors to find out how to get a proposal to them, what they were looking for, and as importantly, what they would run a mile from.

Each of the investors has agreed to answer questions from our readers. You can email your questions to with the subject heading "investment", or complete the form at the bottom of the story.

Bill Maris, founder and managing partner, Google Ventures

image copyrightGoogle Ventures
image captionCompanies with founders who have enjoyed previous success are more likely to succeed, Bill Maris believes

Since 2009, Google Ventures has invested in around 250 businesses including transport app Uber and "smart home" business Nest.

Investments range from around $100,000 to $250m and they have just opened their first office outside the United States in London with a $100m fund aimed at European businesses.

What are you looking for in an investment?

"We're looking for businesses dealing with something complex like sciences, technology and computer sciences; we want people who are technologically enabled," he says.

"Personally, it's like finding someone for any kind of long-term relationship; we need people we can work with, people with big visions, that know their limitations and are humble and passionate about what they're working on.

"The data shows that people who have had previous successes are more likely to have another success. Their businesses are 30% likely to succeed; first timers are 21% likely to succeed; and people who have previously failed are 22% likely to succeed next time.

"We also look not to be the only investment partners. If there's another group of investors you have more diversity of experiences around the table."

What are your red flags?

"Some are obvious. For example, if you have a series of felonies then that will count against you," Mr Maris warns.

"There are also categories that we don't invest in, like online gambling, which would be against our values.

"If you're obsessed with your financial stake at the first meeting that's also a big red light. If you're talking about selling some of your equity at the same time as you're raising money that is likely to be a problem, though there maybe personal reasons someone would be doing that that we would take account of.

"People who can't listen is another one. It's not that we're looking to give instruction but we do want to be advisors, so if you're not open to feedback it's unlikely that it's going to work.

"It also works the other way. We're not really looking for companies that need us. Needing us too much can be a warning sign."


What's the best way to approach Google Ventures?

"We've evaluated tens of thousands of businesses and invested in 250, but we have never invested in a company that came to us out of the blue.

"The best way to approach us is through someone who knows us, knows someone on the team or someone who works at Google. If you can be recommended by someone you rise to the top of the stack."

"We don't take cold calls as we would never be able to keep up with the volume and wouldn't be able to give each one the time it deserves. The best ones will find a way to know someone on the team and get referred in."

image copyrightMahesh Murthy
image captionMahesh Murthy is looking for Indian companies finding solutions for Indian problems

Mahesh Murthy and his partners at Seedfund have been voted the best venture capital fund in India twice. He has spent three decades working in the USA and India and has experience running TV channels; founding Pinstorm, which is one of the most successful digital marketing businesses in Asia; writing newspaper columns; and on TV as one of the investors in India's version of Dragon's Den. Seedfund has made over 35 investments including in Redbus, an Indian online bus ticket venture.

What are you looking for in an investment?

"We're looking for people who have an Indian solution for and Indian problem," he says.

"We don't want to cut-and-paste other models. If someone says I want to do the Facebook or Amazon for India, we're not interested. We want an idea that doesn't have an equivalent.

"We also look for one clear leader. In other countries the wisdom is often to invest in a team, but we want to find one charismatic person. Our biggest successes come from single entrepreneurs.

"Finally, we're looking for people who will give it time. It can take longer to have a success in India so we're not looking for people who are looking for an exit strategy from the beginning."

What are your red flags?

"We don't want people who are going to hedge their bets, who want a big salary as well as a stake in the business. That's not how it works. You have to be committed, be willing to burn your bridges and not have a Plan B. We want people to be lean and hungry, not fat and complacent.

"It's also important that they want to share their equity with their team; we want all of the people involved to get a stake. Humility and risk taking are key."

What's the best way to make an approach?

"The ones which come with someone's recommendation are the most likely to succeed, so coming through someone who knows us is best.

"Another way is to shine in a college or business competition. These days I've got almost 70,000 followers on Twitter and 40,000 on Facebook, so there is potentially far too many connections to be useful, which is why standing out through a personal connection or an existing achievement will work best."

image copyrightEric Hippeau
image captionEric Hippeau is looking for conviction and people who will stay the course

Best known as the former chief executive of The Huffington Post which he invested in while at Softbank Capital, Mr Hippeau is now managing director at the New York-based Lerer Hippeau Venture, which provides early-stage venture capital. He also serves on the boards of other companies, including Starwood Hotels and Resorts.

What are you looking for?

"We're looking for big disruptive ideas," he says, "that can have a very large impact creating a new market or changing the face of an existing market.

"Secondly, we want the kind of person who will see it through, as it's not an easy process. You're going to have to commit a significant chunk of your life; your family has to be on board with that.

"We also want a measure of fearlessness. Most entrepreneurs are very young, there's not much background that you can check, it's more on the personality side.

"We always invest at seed level in the early rounds, so we're talking about $1m-to-$2m - enough to launch a company and get its first customers. These days businesses can become global very quickly."

What are your red flags?

"We want someone who has a personal, strong reason for coming up with their project, not someone who has run the numbers on an under-served market, but someone whose life experience has revealed to them something and made them see an opportunity.

"If you don't have that deep personal conviction it makes it difficult to battle the almost inevitable hurdles that come up when launching any business."

What's the best way to make an approach?

"We only meet with people who are being introduced by someone we know. Cold calls or people reaching out via social networks typically won't get a response. If you know who we are and how we can help then you will find a way."

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