Raising Venture Capital

Managing the first meeting to make sure you get a second

You’re working hard to build your business -- hiring talented employees, securing satisfied customers and effectively managing operations. It is now time to bring in a financial partner. With some presentation planning and the correct approach, you can increase the odds of attracting a firm that will help you to recognize opportunity and navigate obstacles -- while providing your business with the investment capital needed to achieve your goals.

Attracting the right Venture Firm can make a significant difference in the probability (and magnitude) of your success. In order to do so, it is essential that your first meeting leads to a second, and eventually, to an investment.

There are four fundamental issues to keep in mind when approaching a Venture Capitalist for the first time:

1. Manage your time effectively
2. Construct a presentation with a logical sequence
3. Engage in an open dialogue about the business
4. Establish a concrete plan for follow-up

Establish how much time is allocated to your meeting and manage your presentation accordingly

Ask this up front, and recognize that you will have to budget for questions along the way and at the end of the presentation. Moving your presentation along and managing your time will demonstrate that you are in control of the meeting. It is usually a good sign when a Venture Capitalist asks you and your team to stay longer.

Your presentation should be unique to your business, while following a logical sequence

I have found that the following presentation order works well: (1) • Summary Slide (2) • Management Team Background (3) • Market Opportunity (4) • Product / Service Offering (5) • Financials and Deal Mechanics. You can increase or decrease the number of slides in your presentation depending on which parts of the presentation you would like to emphasize.

Approach the meeting as a formal conversation

The Venture Firm you are meeting with is exploring whether or not the business is compelling but also whether or not you and your team would be good people to work with. The most efficient way to do this, in a limited time, is for the Venture Capitalist to ask you open and direct questions. Do not get defensive. These questions are an attempt to understand how you think through problems and recognize opportunity. Engage your audience, be forthright and establish a foundation for trust between you and your potential investor.

Ask about the plan for follow-up

Don’t leave the meeting without knowing what comes next. Ask the VCs about their process, if they require additional materials from you, and when you should expect to hear from them. Then hold them to it. A highly interested investor will keep the interaction going, requesting materials, speaking with customers and scheduling follow-up meetings. Radio silence is as good as a ‘no’.

The purpose of a first meeting is to lead to a second. Sophisticated investors rarely make a decision on the spot.
Look at the meeting as an opportunity to attract an additional partner in your business. Think about what attributes you desire most in an investment firm / Board member.
Keep your presentation concise and logical in its progression. A well organized business overview will make it easier for you to manage your time.
Encourage questions and interaction. Get the potential investors curious and then solidify the follow-up with actionable next steps.