Mick Doherty, of Doherty & Associates, listens to a student elevator pitch.
It was very beneficial, we feel, to have a real VC come in and give
us their perspective on elevator pitching, small businesses, and the
professional criteria for thinking about investing in a small start-up.
Our speaker had a really aggressive personality, which caught some of us
off guard. But a venture capitalist has to be tough, and it is very
important to do some weeding out when it comes to investing in ideas.
His “attacking” approach allows him to get down to the roots of
companies and individuals — to find out who is really serious about
their ideas, and who can produce a satisfactory return. We also agreed
with his opinion on the main purpose of an elevator pitch. First and
foremost it is to spark interest in the product rather than simply to
give numbers and facts. Facts can be important, but the first priority
is to capture an investors’ attention. Only after you have accomplished
that can you introduce some numbers into the strict 90 second pitch
format.
In our opinion, this VC guest speaker was by far the most helpful and
insightful guest speaker we have had this semester. We appreciated his
assertive, yet welcoming demeanor. His constructive criticism was very
insightful. It showed us how deeply prepared any hopeful
client/entrepreneurs must be before pitching their ideas. We learned
that clients must know their business idea/plan inside and out. All
presenters must have anticipated as many questions as possible and be
prepared to answer them without hesitation.
We also learned — really fast — that VCs are not deceived by a parade of
numbers. In fact, most of the time, they don’t believe clients’
financial projections anyway. What they do look for, however, is what
makes the client’s business stand out. What makes them different and
worthwhile? Our guest speaker continually made us realize that grabbing
the VC’s attention is one of the more important priorities when
delivering a pitch and presenting a business plan.
And it was very interesting to hear about entrepreneurship from a
venture capitalist point of view. We were surprised to learn that a
venture capitalist’s return on investment is 40%. Also, their expected
return is 5X. This presentation was an eye opener for all of us.
Figuring out what a venture capitalist is looking for is essential for
our project, as well as for our future aspirations as entrepreneurs. By
accepting criticism of our business plans, we were able to make changes
in terms of our sustainable competitive advantage as a company.
Reading about venture capitalists on paper and meeting one in person are
two very different things. We believe that everyone got a feeling for
just how serious someone needs to be when analyzing a potential business
to invest in.
One of the most interesting takeaways for us was that — when thinking
about getting money from a VC — we formerly thought that businesses
just sought the money because they needed that to pursue business
investments, and were very focused on the money alone. We never thought
about the things that the VC could actually bring to the table, such as
experience, and valuable contacts. This made us look at the process in a
new light and realize it is not about companies begging for money and
willing to take money from anyone. Companies need to be just as
selective when deciding who to take money from as a VC does when
deciding who to give money to.
Overall our guest helped us understand how to form our elevator pitch so
that it draws the right emotions from our audience, and ideally to gain
investment. This speaker was extremely informative, and we will take
everything we have learned from him and apply it to our final project.
Mike Doherty, of Doherty & Associates, listens to a student elevator pitch.
VC: Mike Doherty
Company: Doherty & Associates
Company focus: Doherty & Associates is a business advisory
firm that provides resources for start-ups to help cultivate early ideas
so that they can become commercially successful business opportunities.
So they are a company that helps start-ups with the development of
their business so when they approach VC's they can secure funds.
Mike Doherty Bio:
Prior to Doherty & Associates, he was a director at Third Coast
Capital, a venture lending organization that committed more than $125
million in venture debt investments. Mike was one of the first employees
when Third Coast was established in 1996 with an initial investment by
Cargill, Inc., the largest privately-held company in the United States.
His focus was originating and underwriting venture staged debt products.
In 1998, the group sold Third Coast Capital to DVI, Inc., (NYSE “DVI”).
Mike continued on as a director through 2002. During Mike’s tenure at
Third Coast, the company grew to become the 4th largest provider of
venture debt in the United States. The portfolio included 60 investments
in 17 states and returned a time weighted gross IRR of 33.2%. This
performance level is in the top quartile of all venture funds for
cumulative vintage year composite performance (upper quartile minimum
30.2%).
Prior to Third Coast Capital, Mike was a principal of Southport Systems,
Inc., a consulting firm advising clients on asset management, leasing
operations and credit underwriting. In addition, he has served as
portfolio manager for numerous leasing portfolios.
Mike has BS in Commerce from DePaul University in Chicago. In addition,
Mike is an Alumnus of the 1997 Class of the Venture Capital Institute
(VCI) and the 2006 Class of Leadership San Francisco (LSF). Mike has
served on the boards of the Golden Gate Business Association (GGBA) and
the SF Small Business Network (SBN). Mike currently teaches finance,
marketing and business planning at the Renaissance Entrepreneurial
Center and taught Entrepreneurship to At Risk Youth in the Changing the
Odds Program.
