Investors Arena: Grilling Venture Capitalists

19 Sep 2011 // General, Speaker

After a warm-up video clip from “The Startup Kids,” Mike Butcher (TechCrunch Europe) took the stage as the host for the “reverse pitch” panel with ten investors looking for startups. Lively and funny, but very firm about the three minutes pitch-time allotted to each candidate, Butcher led through the pitch and “grilled” the investors hopeful after their respective self-introductions with a barrage of pointed questions.

What became quickly apparent was that many European investors have a pronounced reluctance to disclose figures that might be of interest to entrepreneurs. According to an ad hoc survey both among candidates and audience, investors with public term sheets were clearly in a minority. While there were good arguments for more transparency and baselines, some investors argued that they would rather negotiate terms with each prospective candidate on an individual basis.

While it eventually turned out that there were indeed quite a number of possible distinguishing characteristics, among them experience, focus, scale, reach, or geographical distribution, it became a recurring and quite entertaining exercise for Butcher to tease out a USP from the candidates that went beyond sheer fund size. Another possible USP was brought up, to great applause, from a member of the audience who pointed out that the timing of an investment, especially toward an earlier stage, could serve as a USP that would be highly appreciated by entrepreneurs.

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