Rodney Brooks, who founded iRobot, had the idea of building a low cost robot that would collaborate with blue collar workers. The robot -- to be built by his startup, Rethink Robotics -- would be safe, intelligent, cheap, and flexible. What made his idea unique was an analogy he drew between computers and robots. He argued that the adoption of his blue collar robot would be similar to the way white collar workers changed their buying behavior when PCs were introduced. Just as PCs boosted the efficiency of white collar workers compared to mainframes, his robots would boost the productivity of blue collar workers, which would bring more manufacturing jobs back the U.S.
The approach convinced VCs who gave $62 million to help fund the startup.
1. Identify the right audience because each investor has different likes and dislikes. You should research potential investors before you talk with them so that your company fits the stage -- early, middle or late -- and the industry that the investor prefers.
2. Get an introduction through a trusted source. You should seek an introduction through the CEO of a potential investor's current or former portfolio companies.
3. Have a brief PowerPoint deck that tells a story in non-technical terms. Your deck should address your venture's team, market opportunity, need for the product and its value to the customer, its position relative to the competition, how much capital you'll need to build the company, and a financial plan.
4. Be intellectually honest rather than answer every question. You should quickly admit you don't know rather than try to bluff.
5. Adapt to feedback. You should listen to feedback, absorb its intent and revise your pitch accordingly.
In order for this flurry of activity to have meaning, you will have to answer two fundamental questions the right way:
Are you a great startup CEO?
VCs spend time with a few dozen entrepreneurs who display the right characteristics. If you are energetic, inspirational, smart, hardworking, honest and magnetic, meaning people want to help you, then you have some of the right characteristics.
But you also need to be tireless in pursuit of market share. Great startup CEOs are driven, relentless, have a vision and want to disrupt a market.
Before you ask them to write you a check, spend enough time with potential investors to show them -- based on your experiences in college, sports or family life -- that you have all these traits.
How do you plan to disrupt a big market?
If you can prove to an investor that you are a great CEO, you're about half way there. Your next challenge is to make the case that you can build a startup that will get big fast so they can generate a return on their investment.
To do that, you will need to convince a VC that your venture targets a strong market with a valuable product. It follows logically, that a combination of these two factors could mean your product will gain share rapidly in a fast-growing market -- and that would give the VC a return on investment.
What is a strong market? It is big and growing fast or ready for a new product that will generate a rapid spike in demand. Doing that means finding customers that have a history of adopting new technologies quickly who your startup can reach without spending too much money.
And like Rethink Robotics demonstrates, a valuable product is based on unique insight, difficult for competitors to replicate, maintains intellectual property rights and delivers clear value to the customer.
To assess whether your venture has what it takes, ask yourself whether you have a vision for how your startup's market will evolve. If you can convince the investor that the answer to both questions is yes, they will be eager to invest.
The author is an Entrepreneur contributor. The opinions expressed are those of the writer.
Peter Cohan is president of Peter S. Cohan & Associates a management consulting and venture capital firm. He is the author of Hungry Start-up Strategy: Creating New Ventures with Limited Resources and Unlimited Vision (Berrett-Koehler, 2012).