How to get on the radar of venture capitalists
Many entrepreneurs and founders ask us how to best get on the radars of the top VCs. There are no short answers here, but there are some pointers and suggestions that may be useful.
As the buddhist saying goes, “The finger pointing at the moon is not the moon itself”. All the pointers we share below are merely guideposts that are meant to be useful in finding the path that works best for you as a founder. In other words, talking about the path is very different to walking the path.
Find the right angels: Speaking of religion, having the right angels on your cap table will make a big difference, and one which can easily be amplified over time. The best angel investors will provide you not only with capital and useful advice, they will also be crucial in finding the best VCs and making introductions to them. I value our relationships with the angel investors in our community, and we look to help them and their portfolio of investments in many ways. Hence, as you look to raise money from angels, you should talk to other founders who took money from them and ask if they were helpful in making introductions to VCs down the road.
Get your name out in the world: As you first start, not only are the odds stacked against you in many respects, but you are trying to make a name for your company in a marketplace that is full of lots of competing stories and companies. Indeed, at this stage it is very important that you find hacks that enable you to get your name out in the community with the minimal expense and effort required on your part. This may involve using your alumni community, the golf course, a blog, or anything else that works for you. But the key is to get your name out there.
Pound the pavement: While ideally you want to underline the name of your company out there with minimal effort, it is not always going to be that easy unless you are a celebrity founder with two well publicized exits to his or her name over the years. Hence, you should budget for lots of time, plenty of meetings, to attend events and make as many pitches as you can. Theses can be at conferences, angel clubs, or any other venues where you can tell your story.
A video is worth a thousand words: Modern technology provides you with ways to amplify your message, and one recommendation that I sometimes give founders is to record key elements of their stories. This can include the elevator pitch, the product demo, or anything else that is key to what you are all about. Once you have these videos, the easier they are to share, and they may in fact save you countless hours on zoom calls telling the same old story. And who knows, your video may just go viral!
Results, results, results: This may sound obvious, but VCs want data points that will look impressive and convincing at their investment committee meeting. As an early stage founder, you may not yet even have your product ready, but in your pitch you should find ways to incorporate data that supports your story and mission. If this data happens to point up and to the right, all the better.
Have your presentation in many formats: You will be telling your story many times, and each forum may be different to the other. An investment committee of five members is different from an audience of five hundred at a conference. Hence, you should have many versions of your story: the video version, the 6-8 page short deck, the longer presentation with more data, a memo - the list can go on. And perhaps most importantly, you should have your three to five sentence elevator pitch down cold.
Practice the art of telling a story: In the early days, your goal is to ensure that VCs, future employees, customers, partners, etc. all believe in the story you are telling. Hence, gaining the skills to tell a persuasive story is certainly an investment worth making for you as a founder.
Be open minded: You don’t know where the best VC will find you, so be open minded about your journey. I know many UK based startups that found their ideal VCs in the United States, and one that found their first investor in Hong Kong.
These are just some pointers, and there are many others that we did not discuss here. But perhaps most important of all, be passionate, and believe in yourself and your story.
Yusuf Ozdalga is London based Partner at QED Investors with a focus on European financial technology and consumer finance companies.