Ask Slashdot: How Do You Sell an Algorithm To Venture Capitalists? 205
dryriver writes "Dear Slashdotters, We are a two man crew who have spent almost three years developing a video processing algorithm that 'upgrades' the visual quality of digital video footage. We take video footage that is "of average quality" — think an amateur shooting on a cheap digital camcorder or on a smartphone camera — and use various mathematical tricks we have developed to make the footage look better — optically sharper, better lit, more vivid colours, improved contrast, enhanced sense of three-dimensionality and of 'being-there realism.' In about a month, we will be presenting our algorithm to some venture capitalists. We have the obligatory before-and-after video demos prepared for this, of course. But there will also be a short PowerPoint presentation where we explain our tech in some detail. Now here is our main question: What, in your opinion, should we — or indeed should we NOT — put in the PowerPoint presentation to impress a Venture Capitalist? Should we talk about how we developed the algorithm at all — what kind of R&D and testing was involved? Should we try to walk the VCs through how our algorithm works under the hood — simplified a bit for a 'non-engineer' audience of course? Or should we stick to talking about market potential, marketing strategy & money-related stuff only? If you were in our shoes — presenting a digital video-quality improvement technology to professional VCs — what would and would you not put in your PowerPoint? Any advice on this from Slashdotters with some experience would be most welcome!"
Some things a VC will ask you (Score:5, Informative)
1. Do you have Patents on the Technology?
2. What kind of money are people/corporations willing to pay for this type of video enhancement?
3. How big is the market? (e.g. Can you deploy the technology in a smartphone app, or does it require specialized hardware)
Re:"Enhance, zoom in!" (Score:5, Informative)
I spent ten years of my life building a company based on selling a mathematical idea. I had the 1 in 1000 companies that got venture capitalism, grew to over 50 people and then died in the credit crunch: leaving me nearly bankrupt, 10 years older and a lot wiser
It's very hard. Be really sure you want to do it.
Do your bookwork first: Read "Crossing the Chasm", "Lean Startup","Prime Solution Selling","Black Swan".
Read blogs: I find the Equity Kicker very good. There are many others
Realise that if you do succeed it will be through blind luck (if I get hammered by other posters, would the other posters just explain that they HAVE read Black Swan and that they can disprove his thesis: not by example but by maths)
The comments above are very good. I partially disagree with the comment about the business plan. In my experience (limited to about 10 VCs, and 1 multi-million dollar successful investment) VCs care only about "the people that are creating the company". Do they have the technical, the managerial and the marketing skills to make this work? Business plans are works of fiction,and the VCs know that. Having said that you still need one, but you need also to demonstrate that you know its a work of fiction, but the potential it describes is real
Most importantly realise that this is your life for the next ten years, and that the most likely outcome is that you will fail.