Getting a meeting with Venture Capitalists and how to run that meeting properly

1. This presentation is made possible by the support of the American People through the United States Agency
for International Development (USAID). The contents of this presentation are the sole responsibility of Rick
Rasmussen and do not necessarily reflect the views of USAID or the United States Government.
Your VC Meeting

2. Best method to get a
meeting?
An introduction from a
respected source
Getting your meeting
Typically around 10,000 of early stage
decks in circulation at any point in time

3. Tech Investor Ecosystem
Angels &
Incubators
($0-10M)
“Micro-VC” Funds
($10-100M)
Smaller VC Funds
($100-500M)
Larger VC Funds
(>$500M)
Incubation
Seed
Series A
Series B
Series C+

4. • VCs rarely take cold calls
• Best sources:
• Other VCs
• Attorneys, Advisors
• Other entrepreneurs in their
portfolio
• Pitching contests: good for
practice but not for leads
Get Introduced

5. Each VC has their own investor framework
• Framework allows partners and
associates a way to evaluate
specific opportunities
• In this case it’s the 4 “P” model
– People
– Product
– Potential
– Predictability
• Know what they’re looking for and adjust your pitch as
appropriate

6. Aligning your Fundraising Efforts
Target List Introductions
Meeting
Mechanics

7. Set your Targets
• How much are you looking to raise?
– Under $25K Individuals
– $25K - $50K Angels, Incubators
– $100K - $250K Angel Groups, Microcap VCs
– $500K - $1M Small Cap VCs
– $2M+ Medium to Large Cap VCs
• What value can your funding partner bring to you?
– Partnerships
– Customers
– Strategy
– Smart money vs. dumb money

8. Know Your Audience
• Who you are meeting with?
• Associate?
• Partner?
• What is the investor’s and the firm’s focus?
• Are there related investments?
• Who do you know in common?
• Did they make money for this or
another firm?
Customize your deck and the discussion
around circumstances

9. Show up ready
• Arrive 10 minutes early
• There will be technology problems
– Often a crappy projector (800 x 600)
– Bring a PC, Mac and a USB stick
– Bring hard copies of the pitch
• Business casual is fine. No need to wear a suit unless
that’s your thing.

10. Pitching
• It’s not just words on slides
– People listen to 7% of words that you
say
– They listen to 52% of your body
language
• Connect with your audience
– Make it relevant to them
– Be clear (first in your own head)
– Pause & let the message sink in!
• Practice (in front of your friends, your
mother, anyone…!)

11. VCs listen in their own way
• Pitch to everyone
• You never know who is going to be your advocate…
Industry
“Expert”
who wants to
show off in front
of peers
Analytic-type
Waiting for the
numbers
Hyper ADD
Type A
super-triple connector
Why are you bothering
me I’m so busy and
important. Just ask
anyone that matters.
Really. It’s super
important that you realize
my stance on this planet
that you know are just a
speck in my universe and
I wish I could have more
time but I have other
matters to attend to…
Naturally
curious who
want to know
more

12. You’re “Meeting” each other
• Be formal but relaxed
• Tell stories
• Be entertaining (but not too much)
• Drop names early and often
– See if there is a connection
• Have fun (but not too much)

13. Remember
• VCs have money to invest
– They want to put it to work
• They’re meeting you to listen and learn
• The purpose of the pitch is not to close the deal.
It’s to:
– Stimulate interest
– Take it to the next step
– Get your next meeting

14. Fundraising process
Term Sheet
• Priced round vs. note.
• Terms, etc.
Negotiations and
closure
Initial Meeting
• Further partner
meetings
Socializing the
idea
• Syndication?

15. Things not to say
Our projections are conservative
• They want you to be aggressive
Gartner says that our market will be $50B in 5 years
• Do your own market research
Boeing is signing our contract next week
• Come back with a contract
Key employees will sign us as soon as we get funded
• Why aren’t they dedicated now?

16. More things not to say
Several investors are already doing due-diligence
• So, why are you talking to me. I don’t believe you.
• Our competition is too big, dumb, and slow to react to us
• Never underestimate competition
• Patents make our business defensible
• Patents don’t matter for a startup.
• If the giant wants to crush you, they will
• All we have to do is get 2% of market share
• We invest in leaders that are looking to be #1 in the market.
• Striving to get 2% share shows that you don’t understand…

17. Remember
• VCs have money to invest
– They want to put it to work
• They’re meeting you to listen and learn
• The purpose of the pitch is not to close the deal.
It’s to:
– Stimulate interest
– Take it to the next step
– Get your next meeting

18. VCs to Avoid
• The banker / attorney
– Someone with zero operating experience
– Ivy league degree
– Can’t add much value
• The dude on 20 boards
– Too busy for you
– How much bandwidth is available?
– Check references to see how much value
the other 19 companies are getting.

19. Avoid
• Yacht club member:
– Wears fancy loafers with no socks and
has a sweater wrapped around his
neck.
– This person will not get the plight of a
penniless, desperate founder
• The generalist:
– A VC who does software, clean tech,
biotech and every other kind of tech
– Only work with VCs who have
expertise in your space.

20. Run away
• The celebrity
– Politicians, movie stars, etc.
– Ashton Kutcher is cute but…
– Creates too much hype without value
added
• The corporate drone
– A former executive pushed out of the
mainstream due to incompetence
– Now working in their venture arm

21. Avoid Avoid Avoid
• The technical legal guy:
– Layers on legalese every time the financing
is discussed
– He won’t change. You’ll never be able to
work together as a team.
• The shark:
– A predator who attempts to purchase
majority control of your company in the first
round
– A bargain hunter without your best interests
in mind
– No incentive left for you or the team

22. Avoid Brokers
• Promises to raise a financing for
you for a % of the dollars raised
– Often a monthly fee whether he’s
successful or not
• It’s your job as CEO to raise
money. If you can’t do it yourself,
you don’t belong.
• In the US, this is illegal unless he
has a broker-dealer license
(SEC /FINRA Series 7 exam)

23. Choosing a VC
• As the CEO - you are the firm
• Your funding sources become your day-to-day partners
– Chose your partners wisely
– They will end up dictating your priorities and direction
– They can help you succeed or take you down

24. Money In à
$
Money Outà
$$$$$
What’s in it for me?
Risk Factors

25. Click here for a Classic Dialog…