VC Minute – quick advice to help startup founders fundraise better
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Now that you’ve researched your venture firms, how you’re going to get introductions to them, and you’ve prepped your raise, take this list that you’ve built and organize it into three main groups. You want your friendlies, your A-List, and everyone else.
You want to start with your friendlies. These should be venture firms where you can pitch, screw it up, do a terrible job, have a confusing deck and no coherent story, and they’re still going to take the next meeting. Hopefully, you’ve got one or two friendly VCs in your corner. You want these to be venture capitalists. You can do this with angel investors. Keep in mind that angels approach startup investing slightly differently than VCs do. Most angels that I know will ask, how do I get my money back? Most VCs that I know don’t want to see an exit strategy. What you’re looking for here is raw VC feedback.
Founder feedback is also good. But when you’re fundraising, VCs are your target audience. And so you need raw VC feedback. If you’re able to talk to three or four friendly VCs, you can start to triangulate the feedback that you’re getting. And if you don’t have friendlies, start with the smallest funds, the ones that won’t make or break your round.
The purpose of meeting the friendlies is to get your pitch and your pitch deck dialed in. Keep in mind that you don’t have to answer every question in the pitch deck. And that’s a whole episode unto itself. But you want to know what the questions are that you’re going to get. And I always recommend having backup slides for the common questions that come up. Just as important is understanding the questions that VCs are asking preparing for those questions, and preparing follow-up materials as well.
If you keep getting questions about a particular aspect of the market, have some market research ready, or an interesting article or some other third-party validation for what you’re doing that you can send as a follow-up. This is advice from Neha Govindraj from Bonside. She said that she had wished she had organized all of this ahead of time as part of her fundraise. She found that she was getting the same questions so she kept having to go back and look for that information and find it and send it again. Create a bookmark folder, fill it with backup information, and have that ready to go to support what you’re doing.
After you’ve been able to dial in your pitch and fine-tune your pitch deck, then you’re ready to go out to the rest of your network.
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