Altgate

The Science & Art of Term Sheet Negotiation

I recently got some comments on a blog post I did a while ago from Yoichiro "Yokum" Taku, a partner at Wilson Sonsini Goodrich & Rosati and the blogger behind Startup Company Lawyer, on my post about evaluating one or more term sheets.  By the way, SCL is a great blog and I highly recommend it as a resource.  If you're looking for a quick education on startup legal issues so you can have an efficient conversation with your own attorney, this is the place to go.

Yokum gave me the following feedback:

At first glance, my initial feedback is that you have overvalued the RORFR/Co-sale and (non-cumulative) dividend rights.  All deals have a ROFR/Co-sale and they are rarely invoked as a practical matter.  West coast deals have non-cumulative dividends, which makes a dividend preference meaningless.  Also, I think that the relative weighting of liquidation preference and anti-dilution is a bit off.  I think that liquidation preference is significantly more important than anti-dilution.

This got me thinking that I should repost my original treatise and see what folks think.  So have a read of the below post.  What do you think?

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By the time I was in the 9th grade, I had been playing chess for a few years (as in I knew the rules) but I didn't play seriously and more often than not I lost.  Then one day at the library (remember, pre-internet) I happened to find a book on chess.  So I read the book and almost overnight I became one of the chess "stars" in high school.  In one of the funnier incidents, I started playing chess during lunch hour and was "hustling" money which on one occasion resulted in a kid pulling a knife on me after I relieved him of a few bucks.  True story.

What was it in that book that allowed me to take advantage of the situation?  Well, there was a lot of basic stuff, some general rules and even some strategy, however, the most useful bit of information, initially, was a table on the relative value of pieces.  You know, a pawn is worth 1, a knight/bishop 3, rook 5, a queen 9 and the king "infinite" unless it's the endgame then it's more like a 4. Experienced players have a "feel" for this from many games played and they can also break the "rules" by, for example, sacrificing a queen for a rook to get better position.  But these are all things learned from experience and best not tried by a novice.  If you are new to the game, you have no idea.  When you are starting out, having some rules of thumb can make all the difference between winning and getting hustled.

What does this have to do with negotiating term sheets?  Well, I think a lot of newbies get hustled when negotiating term sheets because they don't know the relative importance of the various terms.  Have you heard the joke about the VC who says, "I'll let you pick the pre money valuation if I get to pick the terms?"  My goal here is to provide a framework that gives relative value of various terms on a term sheet and allows you to compare them on two dimensions: economics and control (or as my friend Noam Wasserman likes to say, "rich" versus "king"). In the same way that a chess grand master doesn't need rules of thumb from someone else, if you're a seasoned negotiator of term sheets then this is probably equally useless.  And no, this is not based on any academic or scientific study.  It's based on my own experience and, more importantly, that of a few other experts like Dave Kimelberg (Softbank's GC). 

In my view there are 12 important terms on a typical Series A / B term sheet.  Yes there are other terms and yes sometimes they are important, but if you go with the thesis of keep it simple, then 12 is the magic number.  In terms of rating, the rich/king differentiation is important as different people are after different things so depending upon your motivation you may be inclined to pay more attention to one column than the other.  So without further adieu, below is a table showing them as well as the relative importance:

Term	Rich	King
1. Investment / price	10	-
2. Board of directors	-	8
3. Option pool refresh	10	-
4. Preemptive rights	1	3
5. Andi-dilution protection	5	-
6. Registration rights	1	1
7. Drag along rights	1	5
8. Right of first refusal / co-sale	5	-
9. Dividend right	5	-
10. Liquidation preference	7	-
11. Protective provisions	-	8
12. Redemption	1	-

Here a 10 means it is really important to get as favorable a result as possible on this term, a 1 means it is not so important and a "-" means it doesn't apply (i.e. a zero).  The cool thing about having something like this is you can use it as a tool to compare term sheets (provided you can determine how favorable or unfavorable each individual term is...more on that below). 

The next part of this post is to provide a range of typical results for each term which will give you a means to rank each term in each term sheet with a "1,3 or 5" where 1 is "unfavorable", 3 is "fair" and 5 is "favorable."  If you aren't already familiar with the terms in a term sheet, you should check out the model term sheet (basically a template) put together by the National Venture Capital Association. They have other model agreements too, but you will see with the term sheet that they include various options, some discussed here.  Below is a scale for each of the 12 key terms across the two dimensions:

1. Investment/price.  I think there are two ways you can rank price.  One is to rate it relative to your expectation and another is to rate it relative to similar companies (in terms of stage, geography, sector, etc.).  If you don't have comparables, you can fairly easily get them, for example Dow Jones puts out a quarterly survey of VC deal terms which includes pre-money valuation (send me an email if you want a copy).  If you're less than 80% of your benchmark, that's probably unfavorable, if you are within +/- 20% than that's fair and if you're over 120%, then it's favorable.
2. Board of directors.  This term comes down to simple math.  If you give up and don't have control of the board, that's unfavorable, if it's tied, call it fair and if you control it, that is quite favorable.  BTW, the reason I didn't rate the board control a "10" on the "king" scale is because even when you give up control, your board members are bound by fiduciary obligations to the firm, i.e. they can't do whatever they want.
3. Option pool refresh.  Often time this will show up as a separate term in the term sheet, however it is actually just another bite at the apple in terms of price. Traditionally there is a refresh pre-deal so that after the round the company can execute on its hiring plan without needing to expand the pool for 12-18 months.  You will have to develop your hiring budget if you haven't already.  Given that benchmark and your hiring equity budget, I'd say less than 12 months is favorable, 12-18 months is fair and more than 18 months is unfavorable.
4. Preemptive rights.  As you know, preemptive rights give your investor the right to invest in future rounds.  This is of moderate economic value, however you are giving up some control of future financings.  There is remarkably little variation in how this term gets negotiated, probably because of its relatively low importance in the grand scheme.  I'm told the only area that gets negotiated is whether the investor has an "overallotment right" whereby they can take a portion or all of the pro rata of another investor in the same series who didn't participate.  That said, unless something unusual is in your term sheet, it's probably a 1 for rich and 3 for king.
5. Anti-dilution protection. Anti-dilution is a pretty important economic term.  In terms of the range of possibilities, no anti-dilution would be a 5, broad-based weighted average would be a 3 and full-ratchet would be a 1.  I think the vast majority of deals end up as broad-based weighted average. Very few deals avoid it altogether, but it can be done, particularly in later stage or very hot deals.
6. Registration rights.  Reg rights have some economic value and in theory you do give up some control, but in reality they're close to worthless.  You can push on these and most investors will give in when pressed. You can negotiate when the right kicks in and cutbacks.  But bear in mind that investors will love it if you waste time negotiating this because it is not an important term.  Unless something unusual is going on, I'd rate this a 1 on both dimensions.
7. Drag along rights.  Most deals include drag along rights and like many of the other terms, the key is in the voting thresholds.  I rated this a 1/5 on the rich/king scale. In terms of economics the issue is with regard to a sale of the company where the preferred stock, because of special rights, is indifferent to a deal that would be better for Common.  However, the bigger issue is on the control side of the equation where you could get dragged into a sale that you don't want to do.  So in terms of rating both the economic and control sides, I would say that if the thresholds are such that a single investor can unilateral drag along, that's a 1, if it takes 2 or more investors that's a 3 and if it takes investors plus either a neutral party or Common (you) then it's a 5.
8. Right of first refusal / co-sale. I rated this a 5 because this is essentially a "lock-up" on the founders stock which seriously affects liquidity and thus value.  It doesn't really affect control issues.  If you read the actual section of the stock purchase agreement that describes this term it's several pages of bureaucratic procedures for a sale that in the real world you can't imagine ever occurring (which they don't).  As a result, the only real counter party for selling common stock is the other investors or the company with the investors approval and they're all quite likely to low ball.  Unfortunately, I've never heard of avoiding this term completely, so in terms of how to rate it, I'd say that if you can negotiate a right to sell some portion (say 20% on an annual basis) you're at a 5 otherwise if it's a standard lockup then you're at 3.
9. Dividend right.  I rate this a 5 on the economic scale.  In terms of the range, there is no dividend which is a 5, then there is a simple interest dividend which I'd say is a 3 and a 1 would be a compounding dividend.  For some reason, the dividend rate has been 8% ever since I've seen term sheets.  You can negotiate the rate, but the bigger battle is whether you pay a dividend and how the rate compounds. 
10. Liquidation preference.  This is a very important economic term that doesn't have any importance in terms of control.  The issue here is during a sale, how do investors get paid out.  I'd say about 1/3 of deals have a preference at 1X but no participation, another 1/3 have a preference with a cap and participation and the balance a preference with no cap plus participation and that's pretty much how I'd rate it, i.e. 5 for 1X preference/no participation, 3 if with a cap in the 2-4X range and 1 if with no cap and participation.
11. Protective provisions.  This is very important from a control perspective but not so economically. While there are a ton of these protective provisions, the key ones relate to sale/merger of the company and future rounds of financing. As with other control rights, the key is in the voting thresholds so I'd assess this the same as 7 (drag along rights).
12. Redemption.  Finally, we get to number twelve, redemption rights.  This is an almost worthless economic right.  I've never seen or heard of this being exercised and most investors will acquiesce if you push on this.  Unless you see something unusual, I'd rate this a 3.

Ultimately the individual rating combined with the overall importance of each term will allow you to create a weighted average total for each term sheet on both the rich and king dimensions.  While you wouldn't want to make a decision to take an investment on this alone, it will give you a basic idea of where the strengths and weaknesses of particular term sheets lie.  It also gives some tips for negotiating.  For example, you don't want to waste your time negotiating redemption rights and attorney's fees and instead, you want to go to the core of what's important to you on the rich/king scale.

Finally, I'd love to hear feedback from folks.  How would you change the ratings?  Are their other key terms?  Feel free to comment on this post or send me email.

Expensive Gas Is Good

I've been saying this for a while and when I do most people look at me like I'm crazy.  But it's true.  The problem isn't that gas/oil is expensive, but rather that we're addicted to the damn stuff.  Thomas Friedman has a good op-ed in today's New York Times explaining:

When a person is addicted to crack cocaine, his problem is not that the price of crack is going up. His problem is what that crack addiction is doing to his whole body. The cure is not cheaper crack, which would only perpetuate the addiction and all the problems it is creating. The cure is to break the addiction.

Instead of drilling offshore and waiving taxes on gas, as some have proposed, we ought to be raising taxes on gas/oil (of which some of those revenues should be rebated to lower income folks hit hardest by the cost) which will destroy demand while providing an incentive to entrepreneurs and others to develop viable alternatives.  It's no coincidence that the cost of a gallon of gasoline in France is about $9.00 and the fact that 78% of the electricity generated in France is nuclear. 

On a related note, kicking the carbon-based-fuel habit is going to be the biggest new business opportunity in the history of humankind.  If you're advising your kids what to study or thinking of a business to start, look no further.

All-Hands Team Meetings

The all-hands team meeting is unique to startups.  I think it's one of the great reasons to work at (or start) a company.  As an employee you get to interact with the CEO and management team in a way not possible at larger companies.  As CEO, you get to work with folks who actually do work as opposed to just manage others.  All around, it's really fund and refreshing.  Anyway, I recently saw a Youtube clip of an all-hands meeting and wanted to share it along with a list of tips on how to run a good all-hands meeting. 

Now this all-hands meeting is not your typical startup...it's actually Barack Obama speaking to his Chicago headquarters staff.  That said, if you're a startup CEO, you'll see a lot in common with what you do in this video.  Bear in mind that the HQ staff is probably a couple hundred people none of whom worked for the campaign 17 months ago.  The clip is a bit long (about 15 minutes), but worth watching.  So here are a few things to pay attention to (in roughly chronological order, as opposed to importance):

1. Entry.  There are different types of all-hands meetings, but this one was clearly used to deliver a message.  Part of setting that up is to bring the team together (note a key lieutenant was coordinating and actually "introduced" Obama).  It's an interesting bit of stage management, but you'll notice that Obama enters the meeting after everyone is assembled.  It definitely sets the tone of, "pay attention to this message."
2. Continuity.  I like how he starts by talking about the last all-hands meeting (which happened to be about 9 months previous which should be familiar to any CEO who's just gone through a crunch period).   If every meeting has a different message and there is no continuity, it makes it harder for the team to follow (and believe).
3. Honesty. You hired smart people and if you try to spin something, they're going to see right through it.  When recounting the message from the last all-hands meeting (I would love to see that video clip), Obama recounts that he said, "I wasn't sure if I would be the best candidate..."  At another point, he says, "it would have been nice to have a couple weeks off, but..."  That kind of candor will motivate your team much more than a hyperbole or hope. 
4. Humor.  Don't do comedy if that's not your thing, but people always enjoy an inside joke.  A good example is when he joked about the "fist bump" getting so much play in the press because that was one of the few chances they had to "celebrate."
5. Thanks for job well done.  Obama spent a lot of the meeting delivering heartfelt thanks to the team.  He said, "you have created the best political organization we've seen in the last 30-40 years" and continued, "it's not because of the candidate, it's because of you."  It's easy to revert to the "I," particularly after achieving some success, but this is a good example of how to deliver a meaningful thank you.
6. There is no plan B.  Sometimes the message you want to deliver is, "look, we've done a lot of work and we have a backup plan," but other times (like when you don't) you need to tell it straight.  Obama talks about the "enormous sense of obligation" they (the team) now have.  He says,"if I had lost Iowa..." there would have been a plan B (as in Hillary or Edwards or some other candidate), but continues "because we won, we now have no choice.  We have to win."  That was a great Cortes moment!  I could imagine saying something similar after raising an A-round...
7. Call to arms.  A salary gets people to show up, but real greatness requires inspiration and that can only be achieved by calling your team to achieve the greater good.  When telling the team they will have to work harder, longer than ever before he says, "I know that's a heavy weight.  But also, what an awesome opportunity.  You are 5 months from...changing the world!"
8. Finish up.  Notice how he doesn't linger around.  Doing so would dilute the power of the message.  Better to leave the chit chat for another time. 

All-hands team meets are important...take time to prepare and make them effective.  I'd be curious to hear comments from readers on what works/doesn't work for you.

Go Green @ Work

After several months in the oven, I am thrilled to announce the launch of my new venture, Viridus, a community for business professionals to discuss and advance corporate sustainability. 

Viridus is a practical "how to manual" for issues everyone faces at work.  Our belief is that everyone has a "green collar" job and it is how you do your job that actually makes it green or not.  An accounting department working on reducing paper billing, an engineering group designing for recyclability, a purchasing department seeking to reduce the ghg footprint of their supply chain, a facilities department looking to reduce energy or water consumption and especially those who work in corporate sustainability will all find value at Viridus.

Viridus is a members-only site with 100% user-generated-content.  We feel that an environment of business professionals who have responsibility for the sustainability of their organization is particularly valuable.  This way members don't have to worry about being solicited by vendors, press, regulators, NGOs, etc.

We are strongly committed to improving the sustainability of businesses everywhere and look forward to building the Viridus community.  We are currently in invite only private beta.  If you would like to request an invite, please sign up here.  In the meantime, please feel free to send us feedback, comments or questions.

And lastly, over the next few weeks I'll be posting more on my transition from EIR back to entrepreneur, so stay tuned!

Entrepreneur

Canadian inventor Ben Gulak is apparently behind this Segue-inspired motorcycle called the Uno (there are actually two wheels, they're just side by side).  As an entrepreneur, many people tell you your idea is crazy (and all but the most dedicated give up in the face of such criticism).  I can only imagine the feedback Ben got!  Best of luck Ben.

Picking A Domain Name

Anyone who has recently gone through the process of naming a company surely knows the pain involved in picking a domain (and thus, picking the company name).  The dot-com domain has been picked over for 22 years (the first purchase was Sympolics.com back in March 1985) and thanks to real businesses and domain squaters, there are few viable names left unregistered.  What's more, the domain squaters are greedier than ever (lowest ask I've seen was $30K). But the show must go on, and recently I've been going through a naming processes for my new company.  While we came up with some decent names, we just couldn't get the "natural" domain to go with it.  As a result, we've been looking at non-dot-com domains (like .US, .IS, etc.).  Personally I like these domains, but people I talk to are split about 50/50 as "love it" or "hate it" with the former describing it as avante garde and the latter as cumbersome and hard to remember.

What do you think?  You can cast your vote on the left and leave a comment below with your rationale.

Interestingly, I've found that registering non-dot-com, non-US domains is expensive and tough. For example, .IS (Iceland) costs $400 per year and .GE (former Soviet republic of Georgia) requires the domain be registered by a Georgian resident. I think it is a simple matter of time before businesses begin adopting non-dot-com domains en masse. There are a fixed number of dot-com domains and the need for more domains grows continuously. There's probably money to be made in buying up non-dot-coms even though I'm sure squatters have already figured that out...

Buy It (The Company) Now Button

This website, VCWear has been buzzing around the VC circles the past few days.  It's basically a site that sells spoof T-shirs with phrases making fun of entrepreneurs and VCs...for example, "Don't pitch me, bro" or "f@ck it, I'll fund that." That's sorta funny, but not sure I'd part with $25 for the T-shirt.  But the best part of the site is the "buy-it-now" button in the top right of each page...and they're not talking about buy-it-now eBay style, they're talking about buying the whole company (incidentally, they're asking $100K).  I think every company should have a B-I-N button on their site.

   

Crisis Doesn't Build Character, It Reveals It.

A few minutes into the World Solar Challenge (see previous post), my Michigan team found themselves in the middle of a near worst case scenario.  The car was caught in a chain reaction accident that resulted in severe damage to the front of the vehicle (see picture below).  It may not look like much, but these cars are temperamental beasts and can't race like NASCAR with fenders flapping in the wind. 

Michigan was able to repair the damage within 24 hours and began racing again but they were now a day behind the leaders and effectively out of the race. 

Knowing this, the team raced full-tilt and put up a top 3 finish time (sans the time to repair the crash damage).

I'm sure many of the race crew will ask themselves "what if" questions, but in my view, they demonstrated more strength of character and team work than they could have in a 1st place finish.  Sure the scoreboard counts, but in the long run it counts as much how you play the game.  So my hat if off to the Michigan team...may you have better luck in the North American race next summer.

Risk

Those who know me already know that I am a huge fan of solar car racing, in particular the University of Michigan Solar Car Team (my alma mater).  While I think the technology is pretty cool, what this project is really about is educating and training talented students in a hands-on, goal-driven environment that is very akin to corporate startups.

So a little bit of background on solar car racing is in order after which you'll get my somewhat odd title to this blog post.  The first "real" solar car race was held back in 1987, 20 years ago this month.  The race was won by General Motors whose car, Sunraycer, pretty much defined the design of all the solar cars that would come over the next couple of decades.  Held every two or three years, some 50 to 80 teams compete for the title of world champions.  I estimate that over this period something like $250MM has been invested in designing, building and racing these cars.  The races are quite challenging; for one thing they are held on a 3,000 km course through the Australian Outback.  Student teams compete alongside cars fielded by corporations. 

Anyway, I'd like to highlight one point I made previously and that is that essentially every team that made a credible challenge for the world championship essentially followed the design of Sunraycer.  Namely, their car has an aerodynamic shape with solar cells that power batteries that drive an electric motor.  There were numerous "tweaks" over the years testing 3 or 4 wheels, different types of batteries, different types of solar cells, but all essentially the same paradigm.

But this week, Michigan unveiled their latest car, Continuum, which has shattered the status quo.  In a nut shell, what they have done is incorporated lenses on the car which serve to concentrate the solar radiation on ultra high efficiency cells.  These modules are then able to track the sun over the course of the day.  If you look closely at the picture below, you'll see the concentrators in the middle of the car.

  So now about the title, "risk."  Over the years, I have been an adviser to the Michigan team.  When the latest group started two years ago, I greeted them like all of the new teams over the years by telling them about "Michigan tradition."  Michigan, with 4 national championships in solar car racing, is the winningest US team in the brainsport.  After six months or so, the team floated the idea of using concentrators.  I told them it was  a terrible idea and expected that to be the last of it.  But no, they came back with detailed designs.  Becoming a bit worried, I began reaching out to friends to "talk some sense into these kids."  I spoke with a close friend who is an engineer for NASA and quite possibly the smartest guy I know.  I reached out to a friend who was captain of the 1993 Stanford team and had tried something similar (unsuccessfully).  I begged them all to tell the new kids they were crazy.

Anyway, to the team's credit, they pressed on despite otherwise knowledgeable people telling them this was a bad idea.  A long story short, I am thoroughly impressed with the team's perseverance in the face of such opposition.  If it weren't for young people who ignore older folks who tell them "it's not possible" no one would take risks, progress would be slower and life would be boring. 

However the team finishes, I'm proud of their accomplishments.  Go Blue!

Top 10 Tips For Entrepreneurs Pitching VCs

After sitting through 20+ pitches as a “VC” and having given 10 times that from the "sell-side" of the table, I figure it’s time to throw my hat in the ring along with all those offering advice to entrepreneurs pitching VCs. In B-school, we had a thing for "top 10" lists, so please forgive the following format:

10. Get someone you know to introduce you. Everyone knows this, but it's worth repeating. I've seen a lot of CEOs/CFOs with lists of VC funds they are pitching and the status of each (a sort of "fundraising pipeline"). But I've yet to see one of these spreadsheets with the most important two columns: (a) who's going to introduce us to this fund and (b) what's their relationship to the fund, i.e. how does the fund view them. Ideally the person making the intro is someone who’s made money for the fund in one capacity or another. Do yourself a favor and add these columns to your spreadsheet.

9. Don't bring the whole company. Who and how many folks to bring obviously depends upon circumstances, but ideally it's the CEO and one other key executive (e.g. founder, VP Sales, CTO, etc.). Any more than that you're fighting for air time or looking like moss on a rock, neither of which help the cause. The best pitch I’ve seen so far was given by the CEO alone (to a group of more than a dozen).

8. Arrive early and set up your stuff. Every shop has a different A/V setup. Great entrepreneurs come prepared…wireless modem, memory stick, Ethernet cable, hard copy screen shots… Woe to the entrepreneur who starts off the meeting with a bunch of VCs sitting around and yelling "press function-F7!" 

7. Introduce yourself by describing how you've made money for shareholders. Less than 5% of the management teams I've seen have figured this one out. The best intros are ones where multiple people on the management team can say, “I was CXO of Lightning-in-a-Bottle, Inc. for 3 years and we raised umpteen million returning numberteen-X to investors.” That’s what VCs call an “A-team.” Every exec worth their salt should be able to come up with some version of this such as, “I was VP whatever at Blue Chip, Inc. and generated a 5X return on capital with my insert project name” although too many of the later on the team will get a “B” label from savvy investors. At all costs, entrepreneurs should avoid what 95% of us do and launch into an intro with, “I worked at…” and then proceed to name drop 5 companies that are successful but which everyone knows probably had little to do with said executive.

6. Tailor the pitch to the audience. When the VCs are introducing themselves, great entrepreneurs are doing more than just listening; they are qualifying the prospect. Entrepreneurs should take the VC intro part of the meeting to ask a few questions with the goal of understanding the VC’s perspective…how much do they know about my market, my company, competitors, etc.? Armed with this, the team can tailor the presentation to the audience.

5. The slide presentation should be at maximum 10 slides. Do the math: 10 minutes for  introductions, 3 minutes per slide (30 minutes) for the presentation, 10 minutes for a demo and 10 minutes for Q&A...that's your meeting. Bring all the slides you want, but a great presentation only needs 10. Guy Kawasaki has a great book called Art of the Start which talks more about this (and gives a description of what a 10-slider looks like). A lot of folks send 40-page drafts to me with the caveat that they “are working on cutting it down.” I recommend starting the other way around. Start with 3 slides: what’s the market, what’s the solution and how does it work. Then add slides to fill in the holes until the magic number of 10 is reached.

4. When a potential investor asks a question, answer it. It’s rare that the response, “Good  question! If you could just hold that thought until slide 36, I’ll address that point.” The trick to understanding why is to realize that, when asking questions, smart investors are really trying to get a feel for what the CEO is like, how they think on their feet, perform under pressure, listen, relate to investors and what it would be like to work with the entrepreneur in question. So every time a VC asks a question, the entrepreneur should think to themselves, “oh, she just asked me what it’s like to work with me” and then respond.

3. Don’t hide bad news. Entrepreneurs are by definition optimists, but there is a well known fine line between genius and insanity. I’ve seen a lot of entrepreneurs, including myself, paint themselves into a corner instead of proactively defining holes or unknowns in their business plan as manageable risks. Savvy investors bucket these folks as “first-timers” or “green.” 

2. Be concise. 

1. Practice, practice, practice! I've heard many CEOs say, "gee, that's the first time I've seen that slide...John (VP of whatever) do you want to walk us through this one?" It sounds silly, but for those of us not gifted with Bill Clinton-like stage presence, we should practice the full pitch at least 50 times, ideally in front of a video camera and a live crowd. A lot of entrepreneurs “practice” with their first 10, 20 or more VC pitches, but that is really a disservice to all involved. If a CEO can develop a total comfort with the presentation (slides and delivery) then that comfort level shows through and they have a chance of really connecting with their potential partner/investor.