How do I approach a VC?
Hello and welcome back to the second piece of the series of articles related to VCs. Our first article put us in the position to be able to ask ourselves if we were ready to approach a VC, but now that we positively know that we are ready to do so, the next battle we choose to fight should be, HOW DO I APPROACH THE VC? Let’s dive in right away.
Reaching out to a potential investor can be a time-consuming and painful process if you are not connected to the relevant players in your industry or ecosystem.
Based on this first premise, one would agree that a proper introduction by mutual connections should be the first key to press once we decide we are ready to approach a VC. One famous book detailed how a “tribute introduction” by a third party could make you earn trust from your target and successfully close a deal. Follow your peers and use them for your advantage. Establish relationships and build on them. For a VC it will be way easier to be receptive of someone who has already made a, even if quick, introduction rather than talking to someone out of the blue. Even if you are not actively looking for funding, start establishing personal connections as soon as your project starts kicking, therefor you will be using your time wisely in order to get some return. Invest in your network as much as you invest in your business.
Please consider though, approaching a VC without a solid plan can be a disaster and can be a waste of time for everyone. Refer to our first article to know if you are ready.
Hit for those VCs in your field. Do your Research
Based on this second premise, do not try to reel in VCs from different fields. It’s a recipe for disaster. Same way you shouldn’t send a resume out applying for a job that requires 3 languages when you only speak one, you shouldn’t hit a VC who focuses on health companies if you are developing an engine for planes. Yes it is the heart of the plane, but…
By researching the VCs portfolio, and making sure you understand their vertical, you show them that you are serious, that you have done your homework, and that you are smart about your opportunities. When approaching a VC having done your homework, success rate skyrockets. You are specific about your pitch, you think it can be a great match, and follow through on it. Be gently persistent on the aftermath of the encounter. VCs move along slowly, and you need to make them understand you are feeling comfortable with their timings.
Timing is key
Same way you do not head to a restaurant at 2pm in their peak of craziness and busy as hell asking for a job (if you have worked in the field you know it’s a massive mistake because the manager will see right away you have no clue how a restaurant works and therefore he will not hire you), you shouldn’t be hitting up VCs at the strangest of times. Even though you may think it’s smart to send emails at 4am so that the VC gets it first thing in the morning, usual business hours fits better the motto of professionalism. Keep it short and compelling and try to settle a date on the calendar to meet (in person or virtually). TIP: if you have to scroll the email, it’s too long.
DO’s and DON’Ts
Wrapping up in this second article, focus on your pitch and the message you want to get across, but mostly focus on how, when and why you do pitch that message. Key to success is timing. Use your acquaintances and now that everything seems to getting back to normal, go out there and kill it!
See you on the next piece! Stay safe.
