How to approach a VC, if you never did it before
If you are trying to contact VCs for the first time in your life, I bet you are finding surprisingly hard. You have an amazing opportunity to present, shouldn’t they be more responsive/friendly with you?
I have been in your place 1 year ago. This is what I learned.
VCs rarely answer to cold call emails…
Venture capitalists receive thousands of investment opportunities per year and only invest in very of them few (<1% of the companies that they contact with). Thus to navigate through the noise VCs developed preferred channels to search for deals.
Main channels are:
- Referrals — relying on their network of founders, lawyers, recruiters, incubators, business Angels, fellow VCs, etc.
- Events — e.g., meetups, web summit, startup competitions, accelerator events, etc.
- Desk research — leveraging information sources such as Product Hunt, TechCrunch, AngelList, Mattermark, SimilarWeb etc. Some funds even run algorithms to find new investment opportunities
- Social media/blogging — being heavily present on social media and blogging platforms, aiming to generate content that connect with entrepreneurs and trigger new investment opportunities or high probability of being selected by entrepreneurs. For example, Homebrew has a dedicated blog post on the themes that they are interested in the moment (you can see it here)
But dealing with a VC for the first time is like dating…
What can you do?
- Don’t contact, make them contact you
It’s easier said than done, but having a VC interesting in getting to know you is the best way to have sufficient attention span from a VC. What you need to do is become “visible” in the places that they are looking. Some examples of what you can do to increase the odds of being found:
- Have a strong and updated online presence (startup and yours) — AngelList, LinkedIn, Twitter, GitHub, etc.
- Create online content/blog about your business/passions — If an investors is searching for a deal in your field, he might find your post and interact with you to get to know more about it
- Be visible in start-up events and news distributors — e.g., participate in start-up competitions/accelerators, give interviews to news platforms (e.g., TechCrunch) about your product, etc.
- Create a startup event and invite VCs to present — they are always keen in being on participating in great events
Even if these activities do not get you to your desired VC directly, they will help you having new clients or knowing more people that maybe introduce you to investors…
2. Get introduced
Mark Suster wrote a very interesting post about being introduced— “Getting Access to the Old Boys’ Club (how to approach a VC)”. In summary, it is better to be introduced than cold emailing. He also advises to leverage LinkedIn to understand who can help you reach the VC you want.
3. Interact with Investors in start-up and tech events
Go to meetups, accelerator demo days and other entrepreneurial events in your town (list of the main European tech events for 2015/2016 by Stephan Von Perger). There is high probability to meet investors. In any case you will meet people that might introduce you to VCs later on.
4. Interact with Investors on social media
You just need to discover your investor’s social footprint and find what he is interested about. Find an angle that creates value for the investor and interact in a professional manner.
For example if he blogs about deep linking and you have a startup that focus on deep liking you can comment and share the great things you are doing. If he finds it interesting, I am sure he will followup with you.
You have tried everything and there is no way to reach this investor with the previous tactics and you can do it through email?
5. Email wisely
Read this blog post - 9 tips to cold call VCs like a pro
Want to know more about this topic?
You can listen to this podcast — How to approach a VC?
You can read more about how to interact investors in this great and short book — Fundraising Field Guide
If you want to become a Venture Capitalist…
You are even worst. VCs are small and stable structures and so very rarely they are proactively looking for someone.
All this applies to you. The only difference is you need to add value in all interactions with them, through your network and/or knolwedge.
For example in my case I choose to talk about Portuguese Ecosystem, my learnings interning in a VC fund, etc. As a result not only I get to know several investors that proactively talked with me (e.g., asking me for the best investment opportunities in Portugal), but I also get to know great people (e.g., entrepreneurs, startup enthusiastics) — some even introduced me to other investors.