The 'what' and the 'why' of presenting to investors go hand in hand. Rather than asking why you're seeking funding, you should ask why you started your company in the first place. That why should be a compelling argument that forms the foundation of what you say during your VC presentation. Successful entrepreneurs don't ride the coattails of a current trend; rather, they're the first to offer a product or service that creates its own demand, something that its target consumer never knew it desperately needed.
The same holds true when talking to investors. They don't want to hear about current trends; they want to hear about the next big thing. VCs invest in the promise of an idea. Often, they know that not everything they invest in will show a return, but when a Facebook or a Foursquare happens, they reap the rewards of their risks many times over.
So if you're looking for startup capital, it is your job to make them see the promise of your startup. If you're looking for funding to expand, show them proof of the success you've already had, and make them see why your expansion plans can take you to the next level. As always, do your research and have as much data and evidence as you can to back up your arguments.
Though it throws off the mnemonic device, the 'how' of your presentation is just as crucial as the 'what.' VCs get hundreds of emails, calls and meetings every day, so you must stand out from the crowd. Here are some tips for how to frame your pitch:
Be concise: It's called an elevator pitch for a reason. If you have a successful model, it should be easy to explain. The second you have to back up and re-explain, or go off on a tangent, you have lost them. Answer questions directly and clearly.
Be original: Again, don't tell them what they already know about the current online games market or show them another Zynga rip-off. Show them how and why your company will make a new mark on the industry.
Be relatable: Frame your value proposition in a way that hits home, either on a personal level ('Your kids have never played a game like this before'), or in a way that relates to the VC's professional life ('Your firm has invested in social games before, but this takes them to a new level.')
Be trustworthy: Smart entrepreneurs surround themselves with even smarter people. If you have people on your team who have had previous success in business or development, an investor will feel more confident that you know what you're doing. I call that "human capital."
Be aggressive, but reasonable: Money doesn't drop into anyone's lap without a lot of work. Do your research beforehand, and do the legwork necessary to get in front of the right people. That said, accept the 'no's' when they come. Venture capitalism is all about the right timing. A 'no' today could become a 'yes' several months down the line, so don't burn bridges.
It's an exciting time for online game entrepreneurs; the industry moves quickly and the opportunities for innovation are endless.
My final bit of advice as you build your startup is to 'raise and recruit every day.' Like anything, pitching your company successfully, whether it be to prospective investors, employees or customers, comes with practice.
Whenever you talk about your company (and talk about it often), do it as though you were pitching it to someone who will ultimately make you money. Not only will you sharpen your skills, but you never know when the person you're talking to can lead to business deal.