Every day there are some inspiring and envy-inducing stories of great start-ups closing their venture capital (VC) investment round. The entrepreneurs and VCs work really hard to make those deals happen, they don’t happen overnight and not by accident either.
Sadly other entrepreneurs aren’t as hard working and increasingly seem to becoming rather lazy or too expectant when it comes to fund raising. Some (especially new) entrepreneurs seem to think that getting a meeting with a VC is a measure of success.
Yes, VCs in the UK used to be closed networks but thanks to the influence of Silicon Valley, the VCs in the UK have open office days, they are very accessible on Twitter and LinkedIn and most would never turn down a coffee and a chat.
The worrying trend is that an entrepreneur has their minimal viable product, gets their meeting with the VC, runs through the slide deck and has a nice chat for half an hour – the VC even says, ‘maybe’! The entrepreneur leaves feeling good. Then; nothing.
The proposition wasn’t good enough so the entrepreneur doesn’t get the next meeting, let alone investment. The lazy entrepreneur concludes that London is a terrible place to raise funds, no one is investing and they’d be better off in Silicon Valley where the VCs couldn’t fail to see the power and monetisation potential of their product and would be fighting over themselves to invest. Not true.
Fund raising is indeed tough; it’s pretty much a full-time job for the CEO and executive team. Getting a meeting with a VC is the easy part – and we’re not here to help you do that – you can pick up the phone and introduce yourself. So don’t be lazy, do you want investment or not?
How ‘not to be lazy’. Five top tips are:
1. Be punctual – if you can’t be bothered to turn up on time why should an investor give you their time let alone their fund’s money
2. Check, check, check and check again your spelling and grammar
3. Know your numbers – you shouldn’t have to look up your key financials such as profit and loss, and revenue
4.Treat fund raising as a ‘campaign’ – iteration, rhythm and buzz
5. The defining characteristic of the best entrepreneur is that he or she bounces back – so work hard and work smart and when things don’t go well, bounce back better