Venture Capital For Dummies
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You can start making contact with a venture capital (VC) firm or investor after you and the rest of your management team have a few VC firms on your collective hit list. This process is a little like applying for a job: You can paper the world with resumes, but you’re more likely to find a perfect fit if you’re choosy.

Follow the VC’s contact rules for application

Before blindly sending in your proposals, make sure you know how the VC firm you’re contacting wants material submitted. These days sending in a 200-page business plan via U.S. Mail will likely get your application filed into the trashcan at many VC firms.

Most VCs have some text at the bottom of their websites (or on their Contact Us pages) that says to send the deal in e-mail. Pay attention to any caveats: “Send only business plans,” “Send only pitch decks,” “Send only two pagers,” “Be sure your current progress is evident,” and so on.

Follow these instructions to the letter. If they say to use a specific subject in the e-mail Subject line, do it! If the instructions tell you not to e-mail the VC but to get an introduction through one of the firm’s trusted service providers, do it.

Cold call after you submit your materials

The best cold call is the follow-up call. Send your application materials to the VC (be sure to follow all the directions) and then call to tell the VC that you’ve submitted materials. Doing so may seem a little silly, but it’s actually very nice to be on the receiving end of that phone call.

By calling, you’re letting the admin at the VC office hear your pleasant voice, which will remind him that you’re a real person, not just another voiceless business plan. Also, you’ve saved him the bother of explaining the application process because you’ve already applied.

If you don’t get a human on the phone, leave a message saying that you submitted your application. Give your name, company name, and the date you submitted. Then wish the VC a happy day and be done with it.

When you call a VC’s office, you will most likely be referred to an administrator or analyst to discuss your application. Depending on the size of the VC firm, you may not get to talk to the VC himself until you have been pre-screened by his team.

Secure a personal introduction if you can

Just as when applying for a job, the best way to get noticed is first to apply and then get a mutual connection to make an introduction. By submitting your application first and then having a friend call on your behalf, you increase the chances that VC will become interested in your deal through the introduction and be motivated to go read your materials.

Contacting angel investors can be a special challenge because they’re more difficult to identify; these investors often prefer to be anonymous. For these investors, getting an introduction from someone you both know is key.

This is where networking proves most useful. All those events, meetings, and gatherings you’ve pursued produce connections galore — connections you can use to secure the introductions that’ll move our deal out of the pile and into a VC’s hands.

Provide key information

Although each VC firm you plan to contact may have unique rules about what and how to submit materials, most request that you send one of the following:

  • The pitch deck: Most firms request that you e-mail the pitch deck to them. Be sure that you have included all the points about how you will make money, how much money you can make, and how far you’ve come.

    If you send a pitch deck, be sure you send the version that has words on it. The wordless pitch deck is powerful when you’re presenting and nearly useless when you aren’t.

    An alternative that is not commonly requested by VCs but may become more common in the future is a video of you presenting the pitch deck. If you go this route, be sure the audio and video are high quality so that the video enhances and does not distract from your message.

  • Executive summary: The executive summary is typically a one to two page document with a brief description of your company, product, market, team, and details of the deal (such as the amount you are raising, pre-money valuation, use of funds, and so on).

    Many VCs prefer the executive summary as a way to screen the deal because the high-level information tells them whether the deal is in their area, makes sense, and is worth giving a closer look.

  • Business plan: Not too many investors require the 50-page business plan anymore. The VC will ask for various portions of your business plan as he goes through the due diligence process, but it’s not necessary to send the whole thing as an introduction.

    Nevertheless, you still should create a business plan in whatever form you like. It’s still useful as a living internal document for you to use with your team. VCs probably would be happier to start with an executive summary or a business model canvas sketch.

About This Article

This article is from the book:

About the book authors:

Nicole Gravagna, PhD, Director of Operations, and Peter K. Adams, MBA, Executive Director for the Rockies Venture Club, connect entrepreneurs with angel investors, venture capitalists, service professionals, and other business and funding resources.

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