As you may have already learned from personal experience, Venture Capitalists (or VCs for short) are notoriously hard to track down. And for many entrepreneurs like yourself, scoring that first meeting with a VC could mean the difference between life and death for your business.
However, high competition and its crippling effects aren’t just limited to the marketplace — they greatly reduce your chances of getting noticed by decision-makers who have the capital and connections you need.
VCs are bombarded with hundreds of emails and phone calls every day by eager entrepreneurs who believe that they’ve created the next competitor to Facebook, the cure to cancer, or a better way to tie your shoes. As a result, VCs are hesitant to give out their contact information to just anyone.
A common misconception about VCs is that they are rude, dismissive, and arrogant. The truth is that VCs simply don’t have the time to address every business proposal that shows up on their desk — especially when they know that only 30% of them will result in a successful exit.
So, entrepreneurs of the internet: how do you get an audience with the ever-elusive venture capitalist? What can you do to make your proposal rise to the top of the pile? How do you track a VC down and make sure they hear your pitch?
Hold on tight, because we’re about to address all of these questions and more.
Do your research, first.
Most entrepreneurs overlook the fact that working with a VC is more about the relationship than the money. If you just want cash without the hassle of nurturing a business relationship, why not go to a bank?
If you’re ready to work side-by-side with industry experts and receive hands-on guidance from veterans in your field, however, you should demonstrate that you’re willing to put skin in the game, too.
On average, a VC will be involved with your company for 5 years if they exit via merger or acquisition (M&A), or 8 years via IPO. By doing your research and studying up on the firm, you will show them that you value the relationship and are committed to working with the VC in the long term.
Determine if the firm is a fit.
Again, working with a VC firm isn’t just about the money. There is a whole host of factors that determine whether or not the relationship will be beneficial for both parties.
Start by checking out the NVCA’s list of VC funds and identify which funds and firms are best suited for your business. You can also go to sites like Crunchbase or Gust to search for and identify top investors that are active in your industry. Then, build a list of prospects that you would like to investigate further.
Visit each firm’s page and carefully read their mission and vision statements. What motivates the firm to invest and what kind of businesses do they enjoy working with? Are there any specific causes that they promote? Also, don’t forget to check out their client page and read about how they’ve helped various businesses in the past.
Unfortunately, the NVCA’s list doesn’t contain personal contact info for VCs, which leaves you back at square one in regards to scoring a meeting. This brings us to the need for networking.
It’s very unlikely that you’ll run into a VC by chance or sheer luck. You’ll need to build your professional network and leverage your connections to get a proper introduction.
Venture Capitalists rarely go outside their own personal network to find clients and tend to operate solely on referrals. If you know someone who bumps elbows with a VC you’d like to meet, ask them to give you a formal introduction instead of sending out a cold email.
If you don’t have any VCs in your immediate network, try connecting with them on LinkedIn or other social media networks.
Like I mentioned earlier, online platforms like Crunchbase and Gust also give startups and small businesses a great way to connect with potential investors. Whatever you do, just remember that cold emails and cold calls should be used as a last-ditch effort, as they have the lowest chance of provoking a response.
Demonstrate drive and passion.
If there’s anything I’ve learned during my time in Venture Capital, it’s that great ideas are a dime a dozen. In fact, I’ve observed that the capability of the team is a much greater indicator of success than the quality of the idea itself.
This isn’t to say that ideas don’t matter, but rather that even the best idea still remains a mere idea unless there’s a capable team that can execute it.
Two major qualities that I personally look for in a team are drive and passion. Members of capable teams are almost always self-motivated, purpose-driven, and perseverant. If I don’t see any of these qualities in a team, I have a hard time believing that they will reach their goals.
KISS (Keep it simple, stupid.)
VCs are very limited on time. When communicating, try your best to keep your messages short and to the point. Personally, I tend to check my messages while traveling or commuting to and from meetings. Therefore, I usually don’t have the time (or screen size) to read a full-length business plan on my smartphone.
Try to keep in mind that VCs are engaged in many more activities than just finding leads. VCs are also involved in conducting research and analysis on potential clients, making decisions regarding investments, and performing due diligence. Therefore, if a VC doesn’t answer your call or message right away, don’t assume that they’re ignoring you.
Try your best to be patient and be willing to wait up to two weeks for a response.
Prepare a Pitch Deck and Executive Summary
One of the worst things you can do is show up empty-handed to a conversation with a VC. If you’re reaching out to schedule a meeting, ensure that you already have all your supporting documents ready to go.
The two most important documents to have prepared are your Pitch Deck and your Executive Summary. A Pitch Deck is a short powerpoint or keynote presentation, made up of about 10–12 slides, that communicates your Unique Value Proposition (UVP).
In your Pitch Deck, you’ll address:
- Who you are
- Why listen to you
- The big problem
- The solution
- How it works
- The proof
- Your vision of the future
- What you need from the VC
Try to make this presentation easy to skim while still preserving the most vital facts and figures. Your pitch deck should also tell a narrative about your company without turning into a bedtime story (don’t put your audience to sleep).
The Executive Summary is yet another important document to prepare beforehand. It’s not a 100-page business plan, but rather a brief summary of what your business is all about — it’s the “TL;DR” version. Even if a VC wereto accept such a large document, they would immediately turn to Page 5, which is usually the only page that investors read at the beginning.
This summary should contain all the big numbers that investors expect to see, such as revenues and costs, sales figures, previous investments in your company, and more. If you’re still not sure what to put in the executive summary, don’t worry. I’ll be tackling this in a future article.
Remember: your pitch deck already tells the story of your company. The executive summary, however, serves the purpose of helping VCs accurately determine the valuation of your company.
Since we tend to have more work than time, preparing summarized and condensed documents such as these will greatly increase your chances of getting a VC’s attention.
If you choose to communicate with a VC via email, make sure that you attach these two documents to your introductory message so that they can review them whenever they get the chance.
For many entrepreneurs, the words “Venture Capitalist” and “unavailable” are pretty much synonymous. And trust me, I too have experienced the overwhelming frustration of trying to pin down investors for my own businesses.
But now that I’ve had the opportunity to sit on both sides of the table, I’ve come to the realization that short, yet succinct communication is the absolute best method for contacting a VC. And it’s not because VCs are pompous jerks, but rather because they’re just too busy to read more than a few sentences at a time. Try applying this principle the next time you initiate a conversation with a Venture Capitalist.
“But Corey, I’ve tried all of this before and I still can’t seem to get a response,”you might reply.
Well, do you want to hear the good news? It’s getting much easier.
In many ways, our industry is starting to catch up with the times. Today’s VCs are starting to embrace new marketing strategies and are using lead generation tactics to find clients online. They’re also making strides toward being more inclusive, leaving behind the “country club” mentality of decades past.
At Apogee Accelerator Group, my job is anything but traditional. I’m out there flipping over rocks and seeing what lies underneath; I scour the web for exciting new opportunities and founders that are really making a difference.
And I truly believe that we’re seeing the dawn of a new kind of Venture Capital; one that’s less exclusionary and more accessible to anyone with big ideas and the determination to make them a reality.
For the meantime, just hang in there and stay true to yourself. The times, they are a-changin’.
P.S. Feel free to head over to our page and send us a message if you’re looking for Series A to B funding. I promise I’ll get back to you.