For start-ups, there is an excessive amount of information at your disposal on how to attract customers – but there’s very little on how to attract a VC.
So, if you’re entrepreneur trying to get your foot in the door, how do you make investors want to meet? Further still, how do you make sure they listen to you?
I operate as an ‘open VC’ and you can contact me extremely easily – I actively encourage debate and contact, through Facebook, Twitter or Skype. But naturally this means that I’m inundated with a constant flood of emails and although I work very hard to be as responsive as possible it’s difficult for me to meet everyone.
So it’s important, as with any VC, to stand out from the outset – and in order to do that, I think that there are six simple tips to bear in mind:
Understand the venture firm in question and what they look for in investments, so you ensure that your business is a strategic fit. For example if you approached Balderton with a cleantech idea we’d be unlikely to invest as it’s not our core business. Always focus on venture capital investors who have solid expertise in what you do; they can help you the best.
Research the investor you are approaching, ensure your business falls under their area of expertise and double check that there are no conflicts of interest. For example, I would be hard pushed to consider investing in another social gaming company given my commitments to Wooga.
Make it personal:
Your contact strategy needs to be both smart and personal. Try to find a contextual link back to the investor you are approaching or a mutual contact who will endorse you. For me personally, I find those who refer back to a conversation we’ve had online or a post on a Facebook group will grab my attention quickly.
More on VC fundraising:
Best communication channel:
Figure out what is the best channel for that all important first approach. Not everybody can be reached or responds in the same way – some are far better on SMS, others on IM, Skpye, email or just a call. You’ll waste valuable time by choosing the wrong channel.
Show me your product:
If have you a working prototype then send me a link or invite me to join. I spend a good proportion of my day and night playing with prototypes and it’s the part of the job that I enjoy the most. If an investor can connect emotionally to your business or idea, this will create a very positive dynamic from which you’ll reap the benefits over the investment period.
The ‘executive summary’:
You’d be surprised by how many people request to meet but won’t even tell me what their business is about. This is a guaranteed way to turn an investor off. Always make sure you send an executive summary – it must be concise, clear and have personality. It is said that interviewers make up their minds within two minutes of seeing a candidate, well the same could be said for executive summaries.
Most of the executive summaries I receive are good quality. Every now and again I’ll see a really great summary. And once in a blue moon I will be sent something exceptional, something succinct, which offers an immediate overview of the company without being overly complex or technical.
I look forward to receiving many more. I’m always available through @bonanzinga.