Joshua Kraus asked several investors, including Blair Garrou, a Partner at Mercury Fund, for the most important things entrepreneurs can do to meet and secure investment for their startups.
Shark Tank, Dragons’ Den, Lion’s Mouth: these are the kinds of brutal, carnivorous images the media has come to associate with the “investor meeting” (rejected spin-offs include Polar Bear’s Igloo, Chupacabra’s Jacuzzi, and Sarlacc’s Pit).
While an initial meeting with an investor should never be taken lightly, approaching the event with your teeth bared is no way to begin what could very well be a fruitful, long-term relationship.
Meeting with an investor is a meeting of minds, not a battle of warriors. Yes, the entrepreneur’s objective is to win the investor over, and the investor’s objective is to evaluate the entrepreneur’s product – and the entrepreneur himself – but the two parties are also there to learn about each other, to discuss innovation and growth, to make advances to an industry the entire room is passionate about.
To make the most out of this meeting, consider the following advice.
1. Do Your Homework
“More than half of the companies that approach [our firm] are not suitable for funding based on the parameters we talk about on our website.” – Blair Garrou, founder and partner at the Mercury Fund venture capital firm.
Garrou has met with numerous entrepreneurs, and he’s found that too many spend all their time on their pitch and not enough time on the easiest task of all: researching the firm they’re pitching to.
While most VCs share a common mission (invest in and help build great companies), every VC maintains a unique identity. One firm may differ from another when it comes to the sectors they invest in, which stages they invest in, or what size checks they write.
Not understanding these differences can get you into trouble. If an entrepreneur neglects to research the investor they’re pitching to, he or she might wind up sending a business plan for a mobile dating app to a VC that only works with biotech software.
Sometimes these oversights will show themselves during the initial correspondence, and there won’t be a meeting at all. Other times they can slip through the cracks, but when they do emerge – and they absolutely will – you will likely be sitting across from the very person whose time you’re now wasting.