Shark Tank, Dragons’ Den, Lion’s Mouth: these are the kinds of brutal, carnivorous images the media has come to associate with the “investor meeting” (rejected spin-offs include Polar Bear’s Igloo, Chupacabra’s Jacuzzi, and Sarlacc’s Pit).
While an initial meeting with an investor should never be taken lightly, approaching the event with your teeth bared is no way to begin what could very well be a fruitful, long-term relationship.
Meeting with an investor is a meeting of minds, not a battle of warriors. Yes, the entrepreneur’s objective is to win the investor over, and the investor’s objective is to evaluate the entrepreneur’s product - and the entrepreneur himself - but the two parties are also there to learn about each other, to discuss innovation and growth, to make advances to an industry the entire room is passionate about.
To make the most out of this meeting, consider the following advice.
1. Do Your Homework
“More than half of the companies that approach [our firm] are not suitable for funding based on the parameters we talk about on our website.” - Blair Garrou, founder and partner at the Mercury Fund venture capital firm.
Garrou has met with numerous entrepreneurs, and he’s found that too many spend all their time on their pitch and not enough time on the easiest task of all: researching the firm they’re pitching to.
While most VCs share a common mission (invest in and help build great companies), every VC maintains a unique identity. One firm may differ from another when it comes to the sectors they invest in, which stages they invest in, or what size checks they write.
Not understanding these differences can get you into trouble. If an entrepreneur neglects to research the investor they’re pitching to, he or she might wind up sending a business plan for a mobile dating app to a VC that only works with biotech software.
Sometimes these oversights will show themselves during the initial correspondence, and there won’t be a meeting at all. Other times they can slip through the cracks, but when they do emerge - and they absolutely will - you will likely be sitting across from the very person whose time you’re now wasting.
“Taking 10–20 minutes to research a VC’s website in advance will save you some painful surprises down the road,” Garrou says.
To familiarize yourself with a particular VC, start by studying their current portfolio to gain a sense of their segment focus. Read interviews with the investors to understand what drives their decisions. Consult your network for anyone who has crossed paths with the VC and score some intel. The more you know about them, the better.
2. A Pitch Deck in Advance Helps the Relationship
“As an entrepreneur, you probably thrive on surprises. VCs, on the other hand, don’t like them at all.” - Blair Garrou
A pitch deck is a short presentation that entrepreneurs use to provide the investor an overview of their business plan, and it’s typically executed during the initial meeting. It is one of the most crucial components to this meeting, and because it is so crucial, many entrepreneurs prefer to keep it under wraps until the meeting itself. The reasoning here is that if they provide it ahead of time, the investor may have all the information they need to say “no”.
What the entrepreneur is overlooking is the fact that this meeting is also about developing a relationship. By providing the pitch deck beforehand, you’re giving the investor the opportunity to familiarize themselves with the nuts and bolts of your business plan. Now during the meeting, you can spend less time explaining the nuts and bolts and more time establishing a rapport, and discussing the big picture.
“The goal is to get the VC educated before the call, so that you can engage in much more meaningful discussions,” Garrou says.
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