Chapter 4 - Investor Relationships
IN THIS LESSON
Getting a Second Investor Meeting
The VC space is very relational. It is smart of you to build a relationship with investors from the beginning. Don’t just push business with them. You can be interested in them as people, so seize the chance to do so.
Fundraising takes time, linked to building long-term relationships and showing traction over time. By cultivating a relationship, you don’t just focus on the first meeting, you are seeking to have a series of meetings, which serve as get-to-know-you interactions.
Some VCs have made public comments about how a start-up pitches them and then the VCs never hear from the start-up founder/CEO or anyone on his/her team ever again. It appears that because VCs, who are very busy, don’t email or call the start-up leader within a week, the VC is not interested in the start-up. Not necessarily, this isn’t always the case.
So, what action should you take? Follow up on the leads you had the first time around. This is about turning that first meeting / phone call / email you get into a bigger, more important meeting the second time around. You need to figure out how to stay on the radar of the investor.
The following are some ideas to help you act between the first meeting / phone call / email exchange and the second meeting:
Send “thank you” emails.
If any action / next steps were agreed upon in the first interaction (i.e., the investor will try out your product), be sure to line it up and make it easy for the investor.
Hold back a piece (or two) of news in the first meeting and then two or three weeks after the first meeting, send an email sharing the piece of news (“Just want to share this exciting update” or something to that effect). At the end of your email, you can also say that you will follow up with them in a week or two if you don’t hear back.
If 4-6 weeks have gone by with no response from the investor, push a little harder by saying you want to give them a new product demo or walk them through a new customer win. Say you only need 20 minutes of their time. You need to get this second meeting.
Find out who influences this investor you’re targeting and see if your mutual acquaintance can put in a good word for you with the investor. Or tell the investor how you recently spoke to so-and-so, whom they already know.
Start a “whisper campaign” about how you are getting interest from other investors (if it is truthful at some level), but you like this investor, and you then ask them if they need any further information from you to help them in their process.
Do some of the due diligence work for the investors and offer to come in and show it to them. This may seem a bit extreme, but it has been done effectively by some start-ups, at least to get follow-up meetings.
Be sure to map out your timeframe for these various actions over weeks and months. Don’t appear to be too over-anxious. Just do all you can, in appropriate ways, to get that second meeting with investors.