How NOT to get VC money

When approaching a potential venture capitalist with your brilliant new start-up idea, don’t tell you’ve got a great idea they should fund but demand they sign a non-disclosure agreement to learn more.

“If you can’t tell me what you’re doing in three minutes without giving away your secret sauce, it’s not that secret,” said David Crow, platform strategy evangelist for Microsoft Canada.

Crow, who helps start-ups get discounts and assistance developing for Microsoft platforms, was speaking as part of a panel with VCs at the Ottawa Venture and Technology Summit.

Speaking alongside Crow were Bill Byun, managing director of Samsung Venture Investment and Peter Rokkos, partner and general counsel for Comcast Interactive Capital.

Byun added that any NDA request he receives costs $300 to be vetted by his lawyer, plus there are implications for all three men within the companies they work for when it comes to signing a legal document.

Another lesson for VC funding hopefuls: know your audience.

At one point, Byun received an e-mail pitching a new granola bar.

“You really have to know who you’re sending the e-mail to,” he said.

Finally, all three panelists cautioned against getting too creative with pitches.

Pitching the company in the form of a music video might seem like a good way to stand-out, but what VCs really want to see are solid business plans.

What does work, according to Rokkos, is a “crisp, concise statement of what your company does.”

“I’ve got the money,” he said. “But I need to know what more you can bring to the table.”

Networking is also helpful, suggested Rokkos. Especially with social networks like LinkedIn making it easier than ever.

All three panelists agreed they’d be more willing to hear a pitch from a founder recommended by someone they already know and trust.

After all, venture capitalists are human beings too and as Crow noted, every bad pitch he goes over is time he could be spending with his family.