I met with an investor, what happens next?

Posted on Sep 20, 2009 | 75 comments


the day afterThis is part of my ongoing series, “Pitching a VC.”  Getting a meeting with a prominent angel or VC is difficult enough.  Some advice on how to do that was covered in this link – Getting Access to a VC.  This post covers the day after.  I spoke about the topic on Fox Business News yesterday in a great session with TechCrunch50 winner RedBeacon and will post it along with my other VC Videos when Fox puts it on their website.

The Day After (the waiting game begins)

 

 

So you just had an investor meeting.  It sounded like they really liked you.  The promised to follow up with: calls, using your product, talking to customers or “noodle on things.”  Will they?

OK, if I’m going to be honest with you then you need to promise not to shoot the messenger.  Despite best intentions they probably won’t follow up on their actions. And unless you just won the TechCrunch50 (e.g. you’re hot) it probably won’t go very quickly (unless we return to the boom days of VC, which I suspect won’t happen again soon).

Remember that most fund raising takes time.  It’s about building long-term relationships and showing traction over time.  If you haven’t read how to build VC relationships and demonstrate traction make sure to read it.

Why don’t VC’s follow up? Because VC’s (not unlike yourself) are tremendously busy.  The partner you saw is probably sitting on 5-6 boards which means he or she will be busy helping existing portfolio companies.  They probably have 3-4 deals that are further along in their pipeline of deals they are considering (e.g. ahead of thinking about you).  They have probably seen 4-5 new companies this week minimum.  And they have responsibilities for helping to manage their fund.  Plus, now they need to Tweet, use Facebook, attend conferences and keep a blog! ;-)  Not to mention what happens in years where they also need to raise a new fund.

Let’s be honest.  This is not unlike a major biz dev deal you’re trying to sign or a big sales campaign into the VP of a major company.  I like to tell entrepreneurs to treat it like a sales campaign.  EXACTLY like a sales campaign.  You would never go see an important executive at a customer and then sit around and wait for them to realize how great you are.

 

 

As a result, the ball is actually in your court.  Maybe it shouldn’t be?  But the reality is that it is.  So don’t expect an unprompted email or phone call next week.  Don’t be surprised if your logs don’t show that the partner has been using your product.  If any of this happens it’s a bonus (but still doesn’t mean that they’ll follow up. They just had some time and found your product interesting).

 

 

I am really surprised how many entrepreneurs pitch me and then I never hear from them again.  I guess they assume that since I didn’t email or call I must not be interested.  This isn’t always the case.  Anyway, the video from my interview is right below and my guide is after the jump.

 

 

 

So how to proceed?  Read the following as a guide

ENTREPRENEUR NEXT STEPS

radar21. Stay on the radar – You need to find a very polite way to persistently be on the top of the radar screen of your VC.  Start with a very short thank you email the day after your pitch.  If any actions were agreed this should be in the email.  If they said they’d use the product it should have the password.  If they wanted to talk to people this should have the contact details.  If any junior people attended send them separate emails and help them get up to speed on the product.  It is much easier to follow up by calling the junior staff (again, just as you would in a sales campaign).

2. Show a sense of momentum – After a week or two has passed and you haven’t heard back it’s time for step 2.  A polite follow up email saying, “just wanted to follow up with a quick summary of some exciting news.”  Yes, I know only 2 weeks has passed.  That’s why in your original meeting you should hold back some news that you have so you can bring it up later.  Sinister?  Not really – just a good sales tactic.  You’re just trying to stay on the radar screen.  I suggest in your email you say, “I know you’re really busy so I’ll make sure to check back in a week or so.”

3.  Find a way to help the investor – Not everybody has the capacity to do this but if you can you should try.  Did anything come up in the meeting where you think the investor could use your help?  Did you mention an executive contact that they’d like to meet?  Do you know a “hot” company that you think would like an intro (if so, make sure it’s one that’s not currently fund raising ;-) ) Do you have access to an event that’s coming up and you want to invite the investor?  Whatever.  Doing a “not over the top” favor is a good way to build rapport.

4. A reason to reengage – By now if you’re in a normal VC or angel process 4-6 weeks might have passed.  If you know that the best VC processes can take 4-6 months you won’t feel the time pressure.  If you left funding to the last minute you’ll need to be more aggressive, which is a shame.  But your next step is to find a reason that the VC needs to see you again.  This could be a major new release of the product that you’d “love to show the VC because he’ll find it interesting” and you promise to only stay 20-30 minutes.  Or maybe you had a major customer win that you’d like to walk them through.  Or a major shift in strategy.  Whatever.  You need to push the next meeting.

5. Multiple endorsements / touch points – The same strategy that works to get intro’s to people works to get momentum from people.  They need to hear about you from multiple touch points.  It needs to be masterfully orchestrated by you but very subtle.  You need to find out who influences the partner.  Who knows them well or at least somebody that they see on a regular basis.  It needs to be somebody you know and trust.

In a perfect world you say, “I met a few weeks ago with Joe Partner at Big VC Co.  He seemed to be interested.  If you happen to see him I’d really be grateful if you would mention how much you like our product / believe in our company / that you knew me well when we worked at Yahoo! (or whatever is appropriate).  I want to be subtle about it so if you talk with the VC please don’t over play it.”  The more people who mention you the better.

prom6. A sense of urgency - This is the critical bit.  I call it the “prom conundrum.”  Let’s face it – everything we do now is some derivative of what we did in high school.  Four guys are thinking of asking you to the prom.  They don’t because they’re also thinking of asking Susie.  But if they hear that somebody else is seriously thinking of asking you to the prom – BOOM – you get asked.  I wish it weren’t so.  It is.  That’s human nature.  (reminder: don’t shoot the messenger – I’m just telling you how it is).

So how do you create urgency?  First, you do need to create multiple interested parties.  You can’t fake it.  Then see point 5 above.  You need to find a way to get a whisper campaign going that somebody else is thinking about asking you to the prom.  If all else fails you give the VC a call with a very subtle and polite message, “Just wanted to keep you updated on our situation.  We’re getting some strong interest from a couple of firms.  We don’t have a term sheet yet but seem close.  We really liked your firm and just wanted to get a sense on what else you need from me to help your process.”

7. Extra Credit Tip - I’m going to get pounded for saying this so I’m making it optional (but it is a very smart strategy).  Do the VC’s work for them.  What, what?  Yes, I said it correctly.  They’re having a tough time understand how big you can be?  Do the market sizing analysis for them and send it.  They’re worried about competitors? Do a 5-page PowerPoint competitive assessment.  They said they’d call references but haven’t?  Ask your senior customer client to proactively call them.  They aren’t sure about your business model?  Come in and walk the associate through the details.  VC’s (like you) are busy.  The more you make their life easier the quicker you get to yes.

Guidelines for following up

1. Be subtle – All this said, there is such a delicate balance between polite persistence and being a pest.  You need to sail very closely to the line of acceptability without ever crossing it.  You need to show chutzpah without being annoying.  Smile when you’re asking for more meetings and say, “I’m really sorry to push you but I guess you’d want to invest in somebody who pushes customers  bit, too?”  It is not something I can ever teach somebody – it’s like art – you know it when you see it.  People cross the line often.  It’s not pretty.

2. Be concise – Unlike this post you need to be very brief in all communications and meetings.  No VC reads long emails – no time.  If you ask for (or they offer) a favor – ask for 1 and only 1 for now.  I sometimes get requests for 4 things at once.  In this case I’m like a deer in the headlights – I don’t know where to start – so I usually don’t.  When I get one request – I do my best to help.  If you ask for a follow-on phone call or meeting promise to be brief and deliver on that promise.

3. Be persistent – Can’t emphasize this enough.  Don’t be offended that they didn’t respond via email.  Senior people get busy, bogged down and behind.  Send a few times.  I covered the topic on the post I emailed a VC but never heard back.

4. Use multiple channels - My email is always overloaded.  If I don’t respond I promise you that I’m not ignoring you.  If I’m not interested I’ll tell you.  I am just overwhelmed.  If we’re connected on LinkedIn or Facebook – try a short ping there.  If the VC uses Twitter regularly then this is a perfect place to connect.  I love it because it’s restricted to 140 characters so you have to be concise!  But avoid anything confidential unless it’s a DM.

5. Let time pass – If you email me on Tuesday and remind me on Thursday (which happens) you’ve crossed the line.  If you’re feeling pressured because you’re nearly out of cash – then you started the process too late.  That’s not my fault.  Desperation never sells well.

6. Be gracious – Be extra courteous in all communications.  A little good graces goes a long, long way.  Be apologetic of taking up time.  Be thankful for work put in.  I know it’s their job, but it makes a difference so being nice never hurts.

7. Accept “no” for an answer – I can’t emphasize this enough, if you do get a “no” then politely move on.  It’s OK to ask if they know a VC that might be a better fit and ask for a VC intro.

If you think they’re telling you “no” but don’t know for sure I would recommend the following email, “Dear VC, I get the sense that you guys are not interested in investing in my company at this stage.  I appreciate all of the time you put in and hope to convince you next time around.  We are talking to other parties – it would be very helpful if you could confirm that you’re no longer interested just to help me better manage my time.”

Voila.  Make it easy for them to say “no.”  Better that you at least know.  Otherwise they’re not likely to tell you.

  • Pingback: I Met With an Investor, What Happens Next? | CloudAve

  • http://lmframework.com/blog/about David Semeria

    Mark, I really appreciate your honesty, but I have a few issues with the sales analogy. Many companies can all buy the same product, but many companies cannot all invest in the same startup.

    Your very frank advice would seem to imply that the average VC would seem to choose the path of least resistance. That may well be true, but it doesn't bode well for VC returns.

    If I were a VC I would be looking to invest in those companies that can make me the highest risk adjusted return. Everything else is secondary, including their possibly limited inclination to do the VC's work for them.

    No offence intended. It was a brilliant post. But the situation you describe (and in particular the implied power balance) is disturbing to me on many levels.

  • http://twitter.com/davidsmuts David Smuts

    The Messenger speaketh the truth so don't worry I won't shoot you- this is really good practical insight into the “dance” of the investor engagement process. It took me a while to read this post but it was well worth it- read it line by line.

    I take on board what you say because my sales background tought me just the same= don't give up on a customer. The only difference of opinion I may have here is that as an entrepreneur I'm equally as busy- yes trust me- with the facebook, twitter, bank manager, wife, children, lawyers, accountants, brokers, business partners, prospective customers, new hires, tech nerds, bloggers, VAT officers, RSS feeds and other interested investors and whilst my sales experience says don't give up on a customer- it also taught me to quickly identify who is worth pursuing and who is not. In other words, don't chase every customer (investor), only the ones that are strategic to you.

    I sort of take the view that if I don't get a positive reaction it spells two things: either; A) I didn't prepare/engage/sell well in the first meeting (in which case, shame on me, and yes I'll pursue again as you suggest if the investor is strategic to me) or B) the investor is not agile enough for me. In which case, why would I accept or chase an investor who is not agile? What risk would I be taking if he/she were to become my investor and their agillity was lacking at a future time when it crucially mattered (M&As are a good example).

    But what you say resonates here and I think this is invaluable advice for any entrepreneur seeking VC/Angel engagement.

    Thanks for that
    David

  • http://bothsidesofthetable.com msuster

    First, let me remind you not to shoot the messenger ;-) The truth is that the situation is as I describe for most VC's so people pitching need to know that.

    Second, for the “seller” (e.g the person raising money) it is a sales process and should be managed accordingly. That's my main point. Nothing your comment says changes that advice.

    Third, I don't agree with your comments that there is a correlation between following up and returns. The reality is that VC's DO follow up. But they do it with those companies that at that particular point in time pique their interest. But as a single individual you can only follow up on so many companies simultaneously. I believe that the number one attribute of a successful entrepreneur is tenacity so you could argue that those that are most persistent are likely to win and therefore produce the highest results.

    Listen, I'm not saying that VC's are lazy and sitting around waiting for you to do their jobs for them. They're not. I'm saying that given that an entrepreneur trying to raise money already has the odds against them anything that individual can do to separate from the rest of the pack will increase the odds of getting funded.

  • http://bothsidesofthetable.com msuster

    David, thanks for your input. I stated twice in my post that I know you, as the entrepreneur, are as busy (more busy) than the investor. I totally understand that. I'm just saying that many entrepreneurs complain to me that they saw a VC and then never heard back. I'm saying that this doesn't necessarily mean they aren't interested.

    That said, you are SPOT ON about qualifying. Entrepreneurs need to find a way to get to “no” faster so they can move on to other potential investors just as you would in a sales process. As Carly Fiorina once told me – “I'd rather have a quick “no” than a muddy “yes.” And that will be a future post.

  • http://twitter.com/davidsmuts David Smuts

    Carly's a huge influence on me- and yes for me, I would always prefer the quick NO rather than the muddy yes, albeit a NO with some advice on improvement is better than a flat NO.

    One thing I would do as well prior to pitching to a strategic VC (the one you really value as a potential partner) would be to do a dry run in front of a non-strategic VC (sorry if this sounds derogatory or machiavellian of me). By that, I mean do a dry run in front of a VC who probably hasn't made an investment in over a year and is not so well known in the VC world. Most likely you can get some practical feedback/advice out of this chap which you can implement in prep for meeting up with the strategic VCs (the ones you really want on to engage). Just don't tell the poor non-strategic VC chap that this is what you're doing!

    If the meeting goes well then it's a bonus- if not at least it gives you a chance to improve without risking your one shot with the strategic VC.

    David

  • http://bothsidesofthetable.com msuster

    when my TV interview with Fox Business News gets posted you'll see that I said exactly that on air

  • http://lmframework.com/blog/about David Semeria

    Mark, I really appreciate your honesty, but I have a few issues with the sales analogy. Many companies can all buy the same product, but many companies cannot all invest in the same startup.

    Your very frank advice would seem to imply that the average VC would be inclined to choose the path of least resistance. That may well be true, but it doesn't bode well for VC returns.

    If I were a VC I would be looking to invest in those companies that can make me the highest risk adjusted return. Everything else is secondary, including their possibly limited inclination to do the VC's work for them.

    No offence intended. It was a brilliant post. But the situation you describe (and in particular the implied power balance) is disturbing to me on many levels.

  • RajatS

    I think you just summarized everything I learned in the last 3-4 months, plus some extra stuff that I will note for the future!

    It's interesting though that I hear of different strategies for raising money all the time. Not everyone follows this long-term relationship thing – some people like to be a lot more aggressive when it comes to raising money. In some ways, there's a contradiction in the comments vs the article in that you want a 'quick no' but the very essence of building a long term relationship implies you are NOT forcing a decision.

    You can take this as a dating analogy too – some people like to be friends before they start dating, while some people believe in 'love at first sight' and basically force the issue as soon as they meet someone.

    Another issue with all the tips you mentioned is that they take a LOT of my time as CEO. Writing up new analyses for individual VCs is such a pain! Especially when you know they'll skim it at best, and probably respond with a one line reply that may or may not be thoughtful.

    Which is why I've learned how to cut my losses when dealing with VCs. Nowadays, I really do evaluate the partner I'm meeting with to see how thoughtful and visionary they are. If I admire and respect them, I will try to maintain a relationship even if they've passed. If they say things that don't really make sense (positive or negative), I'll probably cut the cord myself. The big difference between a sales campaign and a VC campaign is the closeness of the relationship between VC and entrepreneur – you're not that close and committed to your customers. So I do believe the entrepreneur should also be more discreet about who he is spending time with and do as much due diligence on the VC partners as being done on him (the CEO community is helpful in that respect – there seems to be some bond/respect between startup CEOs that is tough to elucidate).

  • http://twitter.com/davidsmuts David Smuts

    The Messenger speaketh the truth so don't worry I won't shoot you- this is really good practical insight into the “dance” of the investor engagement process. It took me a while to read this post but it was well worth it- read it line by line.

    I take on board what you say because my sales background tought me just the same= don't give up on a customer. The only difference of opinion I may have here is that as an entrepreneur I'm equally as busy- yes trust me- with the facebook, twitter, bank manager, wife, children, lawyers, accountants, brokers, business partners, prospective customers, new hires, tech nerds, bloggers, VAT officers, RSS feeds and other interested investors and whilst my sales experience says don't give up on a customer- it also taught me to quickly identify who is worth pursuing and who is not. In other words, don't chase every customer (investor), only the ones that are strategic to you.

    I sort of take the view that if I don't get a positive reaction it spells two things: either; A) I didn't prepare/engage/sell well in the first meeting (in which case, shame on me, and yes I'll pursue again as you suggest if the investor is strategic to me) or B) the investor is not agile enough for me. In which case, why would I accept or chase an investor who is not agile? What risk would I be taking if he/she were to become my investor and their agillity was lacking at a future time when it crucially mattered (M&As are a good example).

    But what you say resonates here and I think this is invaluable advice for any entrepreneur seeking VC/Angel engagement.

    Thanks for that
    David

  • http://bothsidesofthetable.com msuster

    First, let me remind you not to shoot the messenger ;-) The truth is that the situation is as I describe for most VC's so people pitching need to know that.

    Second, for the “seller” (e.g the person raising money) it is a sales process and should be managed accordingly. That's my main point. Nothing your comment says changes that advice.

    Third, I don't agree with your comments that there is a correlation between following up and returns. The reality is that VC's DO follow up. But they do it with those companies that at that particular point in time pique their interest. But as a single individual you can only follow up on so many companies simultaneously. I believe that the number one attribute of a successful entrepreneur is tenacity so you could argue that those that are most persistent are likely to win and therefore produce the highest results.

    Listen, I'm not saying that VC's are lazy and sitting around waiting for you to do their jobs for them. They're not. I'm saying that given that an entrepreneur trying to raise money already has the odds against them anything that individual can do to separate from the rest of the pack will increase the odds of getting funded.

  • http://bothsidesofthetable.com msuster

    David, thanks for your input. I stated twice in my post that I know you, as the entrepreneur, are as busy (more busy) than the investor. I totally understand that. I'm just saying that many entrepreneurs complain to me that they saw a VC and then never heard back. I'm saying that this doesn't necessarily mean they aren't interested.

    That said, you are SPOT ON about qualifying. Entrepreneurs need to find a way to get to “no” faster so they can move on to other potential investors just as you would in a sales process. As Carly Fiorina once told me – “I'd rather have a quick “no” than a muddy “yes.” And that will be a future post.

  • http://twitter.com/davidsmuts David Smuts

    Carly's a huge influence on me- and yes for me, I would always prefer the quick NO rather than the muddy yes, albeit a NO with some advice on improvement is better than a flat NO.

    One thing I would do as well prior to pitching to a strategic VC (the one you really value as a potential partner) would be to do a dry run in front of a non-strategic VC (sorry if this sounds derogatory or machiavellian of me). By that, I mean do a dry run in front of a VC who probably hasn't made an investment in over a year and is not so well known in the VC world. Most likely you can get some practical feedback/advice out of this chap which you can implement in prep for meeting up with the strategic VCs (the ones you really want on to engage). Just don't tell the poor non-strategic VC chap that this is what you're doing!

    If the meeting goes well then it's a bonus- if not at least it gives you a chance to improve without risking your one shot with the strategic VC.

    David

  • http://bothsidesofthetable.com msuster

    when my TV interview with Fox Business News gets posted you'll see that I said exactly that on air

  • RajatS

    I think you just summarized everything I learned in the last 3-4 months, plus some extra stuff that I will note for the future!

    It's interesting though that I hear of different strategies for raising money all the time. Not everyone follows this long-term relationship thing – some people like to be a lot more aggressive when it comes to raising money. In some ways, there's a contradiction in the comments vs the article in that you want a 'quick no' but the very essence of building a long term relationship implies you are NOT forcing a decision.

    You can take this as a dating analogy too – some people like to be friends before they start dating, while some people believe in 'love at first sight' and basically force the issue as soon as they meet someone.

    Another issue with all the tips you mentioned is that they take a LOT of my time as CEO. Writing up new analyses for individual VCs is such a pain! Especially when you know they'll skim it at best, and probably respond with a one line reply that may or may not be thoughtful.

    Which is why I've learned how to cut my losses when dealing with VCs. Nowadays, I really do evaluate the partner I'm meeting with to see how thoughtful and visionary they are. If I admire and respect them, I will try to maintain a relationship even if they've passed. If they say things that don't really make sense (positive or negative), I'll probably cut the cord myself. The big difference between a sales campaign and a VC campaign is the closeness of the relationship between VC and entrepreneur – you're not that close and committed to your customers. So I do believe the entrepreneur should also be more discreet about who he is spending time with and do as much due diligence on the VC partners as being done on him (the CEO community is helpful in that respect – there seems to be some bond/respect between startup CEOs that is tough to elucidate).

  • chrisyeh

    Mark, one technique I've used in the past is to send regular updates. Think of it as a “Pre-investor Newsletter.” The idea is to update potential investors on interesting developments as they happen. I like to send out such updates every two weeks or so, and of course, only if the investor expresses their interest.

    It takes work, since I have to send out the messages individually (pretty tacky to send it out as a mailing list), but I think it's worth it.

  • http://lmframework.com/blog/about David Semeria

    I wasn't shooting the messenger, but I was breaking his balls a little. Let me repeat: this is very good advice.

    I was just concerned that a pushy entrepreneur with an average story would get ahead of a quiet one with a better story.

    But you would argue that a certain degree of pushiness is an essential ingredient to success, and so is itself a part of the story.

  • http://chrisyeh.blogspot.com Chris Yeh

    Mark, one technique I've used in the past is to send regular updates. Think of it as a “Pre-investor Newsletter.” The idea is to update potential investors on interesting developments as they happen. I like to send out such updates every two weeks or so, and of course, only if the investor expresses their interest.

    It takes work, since I have to send out the messages individually (pretty tacky to send it out as a mailing list), but I think it's worth it.

  • http://lmframework.com/blog/about David Semeria

    I wasn't shooting the messenger, but I was breaking his balls a little ;-) Let me repeat: this is very good advice.

    I was just concerned that a pushy entrepreneur with an average story would get ahead of a quiet one with a better story.

    But you would argue that a certain degree of pushiness is an essential ingredient to success, and so is itself a part of the story.

  • http://bothsidesofthetable.com msuster

    I think your analogy holds 100%. The best sales people determine which customers are really interested in what they offer and are really engaged in the discussion. They cut their time for those that are just kicking the tires. The three biggest tips you'll get in sales are: qualify, qualify, qualify.

  • http://bothsidesofthetable.com msuster

    I agree with this approach. But make it short.

  • http://reecepacheco.com reecepacheco

    Great advice, Mark. Love the prom analogy. I'm doing this dance right now as an entrepreneur, and so far so good (at least on my end!). I'm learning that fundraising can walk you through surprisingly small circles of people (at least here in NYC) and the best way to approach it is to be open, honest and act with good intentions.

  • chrisyeh

    Totally agree. 1 paragraph with a couple of bullet points is more than enough. If you can't convey excitement in that format, you're trying too hard.

  • jenmcclurg

    So, so true. I shared this with my team, as we are in the midst of investor presentations now. One of our advisers last week make a similar point about how investors like to “watch” for a while after first hearing about a new investment opportunity.

    The point resonated with me as a fairly new stock investor. Each time a new stock comes into my awareness I add it to my watch list (after researching it first to be sure it fits with my profile) and then keep an eye on it for a few days or a few weeks before ever pulling the trigger on it.

    Seeing history is one thing, and an important thing at that. But watching something in action, gives a whole different sense for how it behaves. The same logic must also be true for people who invest directly in companies, rather than through stocks. Follow up is crucial. Thanks for the great tips here!

  • http://www.echosign.com/ Jason M. Lemkin

    Mark – Agree 100% as always, but let me add a simplifying thought. About 10 years ago a VC I know was describing part of the way ANOTHER VC was so successful: “When he sees a deal he wants, he drops everything and does whatever he can to close it.”

    I guess the point is if the VC doesn't follow-up with you … and quickly … it's over. They are busy, but they are in the business of investing.

    You should follow up, and especially follow the above advice on this blog piece (for the future), but at a tactic level, 9 times out of 10, just give up and move on to the next VC.

    I've done this since then and it works well. If the VC is genuinely excited enough to end up investing, they will follow up one way or another (maybe not as quickly as you'd like, but pretty quickly in the broad scheme of things). If not, they may keep the discussions going if they are somewhat interested, but realistically, they will never invest — at least not in this round, at this time, with these metrics and traction.

  • http://lmframework.com/blog/about David Semeria

    That was basically my point. If a VC really loves what you're doing, they shouldn't need to much prodding to follow-up. This doesn't contradict Mark's advice. Perhaps VC's have trouble getting really excited…

  • http://seekingventurecapital.com jasonspalace

    monday perma=) the second you mentioned Suzie. this advice likely worked for you, getting you where you are – golden!

  • http://bothsidesofthetable.com msuster

    I think your analogy holds 100%. The best sales people determine which customers are really interested in what they offer and are really engaged in the discussion. They cut their time for those that are just kicking the tires. The three biggest tips you'll get in sales are: qualify, qualify, qualify.

  • http://bothsidesofthetable.com msuster

    I agree with this approach. But make it short.

  • http://reecepacheco.com reecepacheco

    Great advice, Mark. Love the prom analogy. I'm doing this dance right now as an entrepreneur, and so far so good (at least on my end!). I'm learning that fundraising can walk you through surprisingly small circles of people (at least here in NYC) and the best way to approach it is to be open, honest and act with good intentions.

  • http://chrisyeh.blogspot.com Chris Yeh

    Totally agree. 1 paragraph with a couple of bullet points is more than enough. If you can't convey excitement in that format, you're trying too hard.

  • jenmcclurg

    So, so true. I shared this with my team, as we are in the midst of investor presentations now. One of our advisers last week make a similar point about how investors like to “watch” for a while after first hearing about a new investment opportunity.

    The point resonated with me as a fairly new stock investor. Each time a new stock comes into my awareness I add it to my watch list (after researching it first to be sure it fits with my profile) and then keep an eye on it for a few days or a few weeks before ever pulling the trigger on it.

    Seeing history is one thing, and an important thing at that. But watching something in action, gives a whole different sense for how it behaves. The same logic must also be true for people who invest directly in companies, rather than through stocks. Follow up is crucial. Thanks for the great tips here!

  • http://www.echosign.com/ Jason M. Lemkin

    Mark – Agree 100% as always, but let me add a simplifying thought. About 10 years ago a VC I know was describing part of the way ANOTHER VC was so successful: “When he sees a deal he wants, he drops everything and does whatever he can to close it.”

    I guess the point is if the VC doesn't follow-up with you … and quickly … it's over. They are busy, but they are in the business of investing.

    You should follow up, and especially follow the above advice on this blog piece (for the future), but at a tactic level, 9 times out of 10, just give up and move on to the next VC.

    I've done this since then and it works well. If the VC is genuinely excited enough to end up investing, they will follow up one way or another (maybe not as quickly as you'd like, but pretty quickly in the broad scheme of things). If not, they may keep the discussions going if they are somewhat interested, but realistically, they will never invest — at least not in this round, at this time, with these metrics and traction.

  • http://lmframework.com/blog/about David Semeria

    That was basically my point. If a VC really loves what you're doing, they shouldn't need too much prodding to follow-up. This doesn't contradict Mark's advice. Perhaps VC's have trouble getting really excited…

  • http://bothsidesofthetable.com msuster

    But as Paul Graham will say, some times the quite and nerdy guys build much better companies! I'm not talking about the quality of the company, just how VC works.

  • http://www.jasonspalace.com/ jasonspalace

    monday perma=) the second you mentioned Suzie. this advice likely worked for you, getting you where you are – golden!

  • http://bothsidesofthetable.com msuster

    yes, it's a very, very small world where the entrepreneur is at a disadvantage because the investors all know each other (and talk). Good luck on your fund raising.

  • http://bothsidesofthetable.com msuster

    For venture investors it's even more important because as a retail stock investor you can have a short-term sale! Good luck with your fund raising.

  • http://bothsidesofthetable.com msuster

    I agree with your points and David's below. It is true that if a VC gets super excited they'll drop everything. But this rarely happens. If you see 30 VCs you might not meet a single one who drops everything. If you do, you've got your investor! If you don't, re-read my blog post ;-)

  • http://bothsidesofthetable.com msuster

    Two times that I've mentioned Suzie? Hmmm. Must be Freudian. It's my mom's name.

  • billeggers

    Fantastic advice Mark and great job on Fox!

  • http://seekingventurecapital.com jasonspalace

    …i meant that relating the prom to acquiring capital made my day, but you're right, probably Freudian ;) and btw, great Fox interview, guess i should put on my chewbaca mask because i'm almost ready to ask a few hotties to the prom! =)

  • http://bothsidesofthetable.com msuster

    But as Paul Graham will say, some times the quite and nerdy guys build much better companies! I'm not talking about the quality of the company, just how VC works.

  • http://bothsidesofthetable.com msuster

    yes, it's a very, very small world where the entrepreneur is at a disadvantage because the investors all know each other (and talk). Good luck on your fund raising.

  • http://bothsidesofthetable.com msuster

    For venture investors it's even more important because as a retail stock investor you can have a short-term sale! Good luck with your fund raising.

  • http://bothsidesofthetable.com msuster

    I agree with your points and David's below. It is true that if a VC gets super excited they'll drop everything. But this rarely happens. If you see 30 VCs you might not meet a single one who drops everything. If you do, you've got your investor! If you don't, re-read my blog post ;-)

  • http://bothsidesofthetable.com msuster

    Two times that I've mentioned Suzie? Hmmm. Must be Freudian. It's my mom's name.

  • billeggers

    Fantastic advice Mark and great job on Fox!

  • http://twitter.com/citysourced CitySourced

    Keen insights mark, thanks for sharing. C'mon!

  • http://www.jasonspalace.com/ jasonspalace

    …i meant that relating the prom to acquiring capital made my day, but you're right, probably Freudian ;) and btw, great Fox interview, guess i should put on my chewbaca mask because i'm almost ready to ask a few hotties to the prom! =)