A lot of advisors tell founders not to send a deck to a potential investor before a meeting. The goal of this approach is to maximize the potential investor’s excitement. I have found most investors will ask for a deck before they confirm a meeting, so it’s best to have a shorter deck to send via email.
I’ve experienced this first-hand on both sides. Even though it’s tough, startups have to keep their interview projects up to date, especially when you’re asking a candidate to give up so much personal time.
Agreed, the work project shouldn’t take more than a few hours for a strong candidate. The startup should invest the time to make the test short enough to be manageable while also testing the relevant skills.
I agree that it’s a shame most recruiting processes are designed to optimize for efficiency, rather than high quality hiring. I wish people would release more data on this to prove how much better the projects are versus onsite interviews alone — however, it’s very clear from my experience. Unfortunately, I can’t provide specific data, as it’s not mine to release.
I understand why this approach is attractive to founders, as it saves a lot of time. However, given the competition and ratio of meetings/investments for investors — you need to make a great impression. The best way to do that is in person, when the investor is free from other distractions. Video chat is a good last resort but humans still make much better connections in the real world.
I suggest founders start with a low cap and only raise it once they have 1 year of money. A lead can come in later and perhaps set a higher price but I agree with you — dangerous to start high by yourself, as you can exclude investors unnecessarily.
My rough categories by round size are:
Friends, family and credit cards: <$100k
Pre seed: $250k-$500k
However these categories are just my guidelines and change with the market.
500 startups — accelerator & also behaves similar to an angel but likes to follow on in winners.
SV Angel & FRC — Behave like seed funds, from what I’ve seen. Although FRC seems to write more $1M+ checks from my (limited) perspective.