Part 2 in From Seed to Series A: When and how to approach investors

Follow these 11 tips and (hopefully) you can’t go wrong.

1. Decide early on which VCs you’d like to work with — who has expertise in your industry and/or business model? Who invests in your geography? What’s their reputation? Here’s a good list to help you with your initial research.
2. Remember it’s not just about raising money. You’re picking a partner that you’ll likely work with for 5+years. So it’s important to pick someone you trust and respect.
3. Never cold email. The best way to be introduced to a VC is by another founder, especially if that VC has already invested in them.
4. Strike a balance of having time to build a relationship vs pitching too early. Best time for a first meeting is after you’ve launched your product and have a good idea of how it’s working (ie. why there could be product market fit). But unless you’re actively raising, keep it casual at this stage — meet for coffee outside of the office — don’t bring a pitch deck.
5. Don’t dismiss associates — they can be your biggest allies. In big funds, associates will typically do the first level of filtering. If you don’t leave them with a good impression, it’s unlikely they’ll discuss your business with the rest of the investment team.
6. It’s very hard to change a first (or any) impression. VCs meet with tens of companies a week so you don’t want to be cast aside with the other unexceptional ones.
7. Be prepared. VCs will ask A LOT of questions, especially data-related. Decide in advance which metrics you’re comfortable sharing as these will be the KPIs they track going forward.
8. Be wary of “fishing”. Of course you’re going to have a lot of inbound if you’ve just launched your product in the market. Or perhaps a competitor has just launched and investors are trying to benchmark comps (a clue is suddenly receiving 5 emails from VCs and having no idea why). Decide whether that meeting is a priority for you. If there’s a follow up meeting, ask what the purpose of it is and who’s going to be in it. VCs like to have time to socialise deals internally, so it’s a good sign if additional members of the investment team are joining.
9. Only meet if YOU’ve got something to say — you can waste a lot of time meeting with investors. Regular updates are good, especially around key milestones but meeting more than 2–3 times a year (unless fundraising) is unlikely to be a good use of time.
10. Always ask for feedback. Remember it’s a two-way conversation! Ask potential investors what they would expect to see by the time of a Series A, what concerns they have or what they perceive the risks/challenges to be and what else they’re seeing in the market. Ask how they could potentially help you in the future.
11. Be clear whether you’re raising or not raising. The best companies will have confidence that they are raising. They know they’ve hit an inflection point, that they’ve proven product, market, fit and are ready to go.

But don’t just hear it from a VC. Here’s my interview with Samir Desai, CEO and co-founder of Funding Circle, on raising his Series A.