My first true exposure to the real world of venture capital began when I started my internship this past semester. It has been a great, enlightening experience to see how the process works — and I’d love to share some of those insights, because I believe they are really helpful to anyone. It does not matter what industry you are going into or what phase of life you are in, these things can be applied anywhere because business is everywhere.
Be straightforward in your pitch to a venture capital firm
I cannot begin to tell you how many times entrepreneurs have pitched their ventures and left venture capitalists’ faces confused. Founders pitch their brilliant ideas using these fancy keynotes and animations and blocks of text , forgetting the whole point of the presentation: to explain their idea. Simpler = better. You can add all of the fireworks at a later time — in the beginning, just make sure that the person you are talking to knows what it is you are talking about!
Treat your VC pitch like an interview–be on time!
Working in due diligence, I have worked with a lot of different founders in finding information about their business model and where they see themselves in the future. This is great — I love hearing different stories about how companies get formed and so on. But, whether you like it or not, impressions are everything. And a great way to leave a disorganized impression is to show up late to a call or to deliver information late. This will, from the get go, set you back. And its not me being hard-hitting, rather its me, even subconsciously, being human. When you are trying to raise money, every little thing matters — so be on time!
Pitch your ideas to the appropriate VC
A lot of companies reach out to venture capital firms who are completely out of their cycle. What I mean by that is that seed stage funds cannot put together the money to invest in late stage and vice versa. So you should not waste the effort trying to convince a VC to do something they can’t. But you can start the conversations early and maintain a relationship with them for when you are ready!
Do your research on the VC
As a company it is just as important for you to do your research on the VC as it is for the venture capitalist finds it important to do research on you. You should check on their portfolio companies and see how they like their investors as partners. It is just as important that you find them to be a good fit.