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Getting a meeting with Venture Capitalist is very difficult, but there is such a thing as being too fast to connect. If you don’t prepare properly, you can burn one of your shots to make a great first impression.
From the moment you make it public that you want to invest, you turn the glass around for about six months. At that point you should be able to get all the funding you want, or investors will start to worry about why you took so long. Meeting Venture Capitalists and raising Venture Capital is not something you should do on a whim, you should be as prepared as possible to increase your chances of success. For the entire six months, you want to focus on talking to investors, not doing what you could have done before.
Here are four things to look for when selecting yours.
Know that you are ready
The world of pitching can be brutal, and there is no room for hesitation. You have to be 100% confident that you are ready, or that potential investors will sniff out your uncertainty.
For first-time founders, the difficult question is: how do you know you’re ready? It’s hard to dispel doubts when you feel like a hypocrite, and trust me, we were all there. The crucial thing is that the story of your startup is clear. What problem does he intend to solve? How does he do this? What’s it about you that other companies just can’t copy your idea?
When you are ready to start interacting and meeting with venture capitalists, you will know your story so well that you can explain it in a simple solution sentence. Practice it until you know it so well that it looks like it’s part of your DNA. Here is a sample:
“We are doing X (problem solving) for Y (specific audience) by Z (what is your solution?)”
You should also have a clear plan of how you will use the money you invest. They are taking calculated risks and need to know what to do next so that their money is not wasted. Keep the exact number you want, in what areas the money will be used and most importantly, with funding and for how long KPIs (Key Performance Indicators) can be achieved.
If you can do these two things, you are ready to contact VC.
Do your homework
You’re competing with some of the brightest minds in the world for funding and VCs are full of high-quality requests, so you need to get the basics right. Mispronouncing someone’s name or spelling them incorrectly indicates a lack of care and a lack of eye for details. This may mean that your email will be immediately moved to their junk folder as a result. A VC once told me that they see a lot of big companies, they find small flaws as a sign of saying no. Take a little extra time to make sure you get the little details right.
Before contacting any investor, you should make a hit list of who to talk to in a spreadsheet. Collect all their related information here. You want to answer the following questions to make sure they are also contactable people:
- In which vertical do they invest? , For example, if you have created a dating application, do not contact the Enterprise SaaS investor.
- At what stage do they invest? , Some venture capitalists will only invest if the company is in the next round of funding or when the company is close to an IPO. If you are not there, then you are wasting everyone’s time.
- In what geographical region do they invest? – If you live in London, don’t waste your time building a pitch for someone who has never invested outside of Silicon Valley. Yes, COVID-19 has changed the cards on this, so you can try, but first focus on the investors in your geographical area or those who want to invest in your region.
- Who’s in their portfolio? – You want to make sure you are not directly competing with anyone in their existing portfolio. It puts them in a conflict of interest and if they can’t see a compromise, they’ll pass you by.
In addition, be sure to check out their website and any interviews available online. It can give you an idea of their style and personality, so you can approach them properly.
Build your network before meeting with venture capitalists
A common mistake of first time founders is to try to go straight to meet the venture capitalist without first joining the wider community. If they have heard good things about you from someone in their network before they talk to you, you can get off to a very good start. You get points for how you land at their desk. Venture capitalists are human and like everyone else, the opinions of those they trust influence their judgment.
You should actively connect with trusted advisors, other investors and most importantly, other founders in their space. One of the best ways to reach out to a venture capitalist is through someone he or she has already funded. The founder who introduced you must have gone through a similar process and have a strong understanding of the investor’s personality. Alternatively, if you are not suitable for the investor, but they like you, they can make you a champion with other investors and get you to the door.
The important thing is to build organic relationships where people don’t feel like it’s being used. You should bond with people on your shared passion and add value wherever you can.
Hopefully, you will find people with a “pay it forward” spirit and then enter the game of karma when you are on the other side.
Build a teaser deck
Some founders try to get their entire pitch deck ready before they think about meeting adventure capitalists, but in reality, things change so quickly that your deck will quickly get old anyway. Instead, focus on creating a teaser deck of just five to eight slides. Send this along with your pitch email to give a potential investor a better idea of what your company is doing without contacting you.
This works because you are making their life easier. Instead of needing to see you or arrange a meeting, they have the information they need immediately available. Conciseness is crucial, so you will not demand too much on their time. It should contain a great intro blurb that you hope will excite any investor who opens it.
As well as simplifying the investor’s decision, it also saves you from meeting an investor who is not right. This prevents you from chasing the dead end, and you know that if someone has read it it is a hot opportunity because they already know enough to make an informed decision.
Move forward with understanding and build relationships
When it comes to innovation, “go ahead and break things down” is a great mantra, but the world of investing is not exactly the same. You only get one chance to meet an adventure capitalist who can change your business, you don’t want to blow it up. Prepare in advance, and you will reduce the likelihood of mistakes and increase your chances of getting that all-important funding.
Donna Griffith is a storyteller and pitch alchemist who has helped hundreds of global startups and VCs raise more than અ 1 billion. She can be found online www.donnagrifit.com,
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