The Funding Guru

Homer

Have two brains when talking to Venture Capitalists

You are standing at the end of a board room, licking your lips, a warm moist sweaty hand leaving a print on the table, that if laden with turkey, sweet potato, gravy and stuffing – would be a Thanks Giving dinner for three families – but putting hot platters of food on top of the highly buffed cherry wood surrounded by misted brown glass floor to ceiling windows, would be close to sacrilegious to all the furniture lovers out there.

You have done it – your carefully crafted email passed to a friend who reassures you they have a relationship with a ‘known’ VC – actually arrived in the hands of the VC and something in your hopefully constructed paragraphs encouraged them to schedule a meeting with you – and here you are – your laptop whirring and the small machine rendering your first power point slide onto the pale cream wall. 

A younger than you would expect, happy, hip guy strolls in – a perfect all American boy with near teenage good looks and a smile which makes you wonder if you’re about to be asked if you want cream with your coffee – is this an assisant to the VC?

…then the penny drops…no, this is not some intern or recently minted college grad…this is the Venture Capital – damn, they make them young don’t they?…

Doing your best to swallow as all the fluid in your mouth decides to disappear into your twisting gut; you press the down arrow on your presentation and begin to take the VC through it…

…who you are…

…who the team is…

…why this is the biggest market opportunity since the Ford Motor car…

…why you are the right team, nay, the only team to bring this soon to be huge business to the world…

…the barriers that will stop anyone following your world changing idea with a copy of their own…

… And before you know it – you’re done.

Presentation over.

The last slide.

And, with one of your trusty team members flicking the light switch up – you blink into the smooth face of the VC and not for the first time, wonder if he’s shaving yet.

So should you ask him a question or wait for him to ask you?

Whew – question answered – his pen taps on the table as he ‘hums’ – thoughtful…breaking the ice and asking the first question…

And during the next 33 minutes, you have a discussion, listen and retorting as wonder boy pulls and picks your baby apart…

Perhaps it’s the size of the opportunity – perhaps it’s a half complete team – perhaps it’s too close to a company in their portfolio – perhaps you need a few customers…or maybe, just maybe…he loves it and want to introduce you to his partners at their regular X-Day meeting – and you are on your way…

Now you can change the table, you can change the brown mist on the glass but much of the rest will likely be close to what you experience when you meet your first few Venture Capitalists – Oh, OK, they might be older than Wonder boy mentioned above…maybe…

But one thing that is an absolute certainty – you need to be in two brains when talking to VCs – the one that is making your mouth move and helping you put complete sentences together (if you’re lucky) and the other needs to be recording and analyzing because it may take 1 or 5 or ten VC meetings before you start to get real traction – hey, you may also be lucky and get that traction immediately – but either way – have more than one VC meeting and in each of them – learn what elements concern them, learn what parts of the business model they consider a weakness and consider if they’re right. If they are, work on fixing it and during the next presentation, home in again on those areas that are of concern.

Why?

A few reasons – you will only get VC funding when you are ready to get VC funding…

By listening and understanding your business weaknesses, you can address them and ensure when you next present, they’re not weaknesses but perhaps strengths.

Last – VCs see a lot of businesses and business plans – they tend to get pretty switched on about the areas of concern and weakness – if they point them out to you – take it as extremely valuable advice that you got for free. Hey – maybe they’re right and by listening and find a solution now, you might save yourself a lot of time, money and pain later. And worse case – by listening and addressing, it makes your next VC presentation that much stronger and your chances of securing the large check your business needs much higher. Do this enough and you WILL raise the money you need for your business – unless it’s a completely crazy idea of course…

So present, kick ass, sell your business but listen to the challenges and the suggested weaknesses – don’t take them as personal slights – they’re not, they are learning opportunities that will get you closer to raising a significant amount of money for your business and may help you identify and resolve business challenges very early in the life of your new business. 

Remember – it’s not personal – its business!

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