Erica Van, Venture Investor at CRV, and Madeline Keulen, Vice President at Victress Capital, shared how founders can nail the first wave of communication with VCs (from outreach to discovery call) in order to secure a partner-level meeting.
Process at Victress Capital
- Founders start out with the initial outreach which may lead to a first call. If that goes well, there will be a light round of diligence and then potentially a partner call.
Process at CRV
- Similar to above. For CRV, the level of diligence will depend on what stage you’re raising. For seed stage founders, they’ll look at financials, market research, data, specialists, referrals, and your customers. If that goes well, they’ll bring you in (currently on Zoom) to meet with the entire partnership. When it comes to growth investments, diligence starts to sway heavily financial.
- Given the pandemic, it’s actually easier getting through to VCs with cold/direct emails as they’re spending more time on email right now.
- For cold emails, share why you would be a strong fit and show that you’ve done your research. Whenever possible, add in commonalities. Any shared events, accelerators, connections?
- Take the time to find the right person at the VC. Make sure your industry aligns with their expertise.
- Regarding warm intros, try! try! try! to get a warm intro over sending a cold email! Don’t underestimate the power of a warm intro — yes, it’s more time consuming but it’ll payoff if you can convince your seed investor or someone in your mentor or founder network to send a recommendation on your behalf.
Structuring the Call
- Many VCs let the founders lead the call and determine the structure. It’s important for founders to cover their background/story, why they founded their startup, their team, and their vision of the future. After that is out of the way, try to make the call coversation. The more back and forth dialogue, the better.
- Try to avoid a page by page deck review. Especially if you sent your deck over beforehand!
- Do what you can to really emphasize your team. This should be a big focus for the first call. For every pitch call, do your research to figure out what get’s this specific VCs gears turning. Check out their Medium or blog to find what’s important to them. What is their fund about? What do they continually highlight? Few examples: founder market fit for CRV or product led growth for Openview.
- Ask questions! If it doesn’t seem like a good founder-VC fit, ask if there are other firms they recommend you look into. Ask the firm what they’re interested in.
- A reference is almost always taken if the introduction is coming from someone the VC trusts.
- There’s a big difference between “I know this person and I can vouch for them” and “This person reached out to me and I wanted to pass it along in case you think it’s a good fit.” Do what you can to find a strong warm intro for the VC.
The Pitch Deck
- If a point is covered in depth in the deck, it’s not worth spending too much time chatting about it on the call.
- For seed investments: roughly 75% of the decision whether to invest or not depends on the founding team. Has the founding team worked in this industry in the past? Have they built strong product in the past? Can they connect the dots why it’s important to them to build their product? How would you rate their technical skill level? Also important, if the market is too obvious, it’s potentially too late to invest.
- For series A investments: the founding team is still super important but traction and revenue become key players as well. Is the market strong? Is the market growing? What is the MTM revenue growth? (Hint: they’re looking for 10-15% MTMT revenue growth). Are they hiring well? Are they selling well?
- In the current COVID-19 climate, references are key. Pay close attention to speed and strength. Send your references over quickly and make sure they’re strong references who will go to bat for you.
Thank you Erica & Madeline for taking time out of your day to share your expertise with the greater Venture Lane community!
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