What to expect on your first meeting with a VC
As a VC, I get this question a lot from founders: “What should I expect from my first meeting with a VC?”
VCs understand that everyone’s time is valuable. That’s why it’s important to clarify what we both want out of the conversation, so that we can maximize both of our ROI. So the question for you is: what do you (the entrepreneur) want to get out of the conversation?
The first thing to ascertain before reaching out to any investor is whether they’re the right investor for your business.
Many VC firms are thesis- driven. Some theses are strategy-based, such as only investing in ‘business-to-business software companies’; geography-based like investing in ‘startups coming out of New York’; network-based such as investing in ‘Princeton University alumni startups’; or industry-based like investing in ‘cybersecurity companies’.
If you are expecting to pitch and raise money from a VC, but they do not focus on your type of company, you may end up disappointed. That said, you can still have a productive conversation. It’s just about setting expectations upfront, as much as possible.
It’s important to keep in mind that as VCs, we spend much of our time meeting founders, talking to lots of companies, and building strong relationships, so it’s essential we go into every conversation with a clear picture of our objective. Before hopping on an intro call, you should try to gauge if this will be a pitch meeting, or more of a general, high-level ‘get to know each other’ call.
If it’s a ‘general conversation’, then as a VC, we will be focused on listening, encouraging, and learning as much as we can about your background and current projects. These meetings are typically meant to make a connection and determine if there are opportunities to collaborate in the short, medium, or long term. At a minimum, our objective is to see if there are ways we can be supportive along your journey.
However, if it’s a ‘pitch’, then we still listen and encourage, but we will also approach the conversation like it’s an opportunity to invest, and our questions and feedback will be quite different, and much more specific.
When screening new startups, VCs want to get clear answers to the following questions on a first call:
What does the company do and why are the founders building this?
What is the team’s background and story?
How does the product work, and what problem(s) does it solve?
What’s unique about this company that sets it apart? What are your competitive advantages? (examples of this include founders with unique domain experience, market insights, or distribution plans that are hard to replicate)
Is the company currently fundraising? If so, size of round? Terms of the deal? Timeline of the round (i.e. when would they like to finish fundraising)? How will the funds be used?
Getting answers to these questions help us form an initial picture of what the entrepreneur is working on, what makes their business special, and why they are raising money, if they are. We will also have a better idea if what you are working on will fit into our over-all investment strategy.
Every VC will have his/her own style of handling intros, but generally, it’s important to be prepared to cover these points at a high level, since you often only have 30 minutes on an intro to put your best foot forward.
At the end of the day, it’s the substance of what you’re building that will win you supporters. But being well-prepared to discuss your vision in a compelling, concise way will win you support even faster.
Best of luck!