Early stage venture funds often come across bright-eyed, bushy-tailed entrepreneurs with ideas that the founders think will change the world.
Getting funded is about proving that you can deliver on an idea, not about a secret game-changer that you can’t demonstrate or even explain.
Southern Cross Venture Partners is an early stage venture capital firm that invests anything from $250,000 to $10 million in Australian technology start-ups, particularly those that can expand in the US.
Southern Cross founding managing director Bill Bartee sat on a panel at IBM’s SmartCamp conference in Sydney last week, and was asked about the worst pitch he had received.
Here’s what he said:
Quite frequently, we get entrepreneurs who come in and they have this secret black box. They won’t tell us about it without [us] signing an NDA because they think the idea is worth billions of dollars.
I had a guy who came in to the office one time and after about half an hour, I said what is it you really do, because I couldn’t figure it out.
He said he couldn’t tell me. He didn’t have any customers and didn’t have his product yet but his idea was worth a billion dollars.
I said to him, ‘You know, great idea minus execution equals hallucination’.
Needless to say I don’t think he ever got funded.
But if you’ve been turned down by VCs, not all is lost.
The parting advice from panellists Bartee, Michael Panaccio from Starfish Ventures and Doron Ben-Meir of Commercialisation Australia to entrepreneurs was to persevere.
“No matter what guys like me or Doron or Michael say, keep going with your business,” Bartee said.
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