You are an entrepreneur who wants to find and win over a venture capitalist (VC) or an angel to give your idea a financial boost. Yet many entrepreneurs make basic mistakes in that first meeting. Here are five mistakes to avoid:
- Cold call instead of trusted introduction – A common belief among VCs is that “if a CEO isn’t resourceful enough to find someone I know to recommend him to me, then he isn’t going to make a very good CEO.” Don’t blind email – I have never funded a company based on blind mail.
- Went to VC without preparation – You should study the VC meticulously before the first meeting. What’s his background? What other companies has he funded? What are the common elements that you might try to demonstrate and leave a positive impression?
- Poor communication – You need to communicate succinctly. Start with the one sentence that describes your company. Be prepared to succinctly talk about: How large is the market? Who are the competitors? How are you differentiated? What makes your team special?
- Too much time on market and not enough time on product and team — Don’t spend too much time on market overview or opportunity. The VC probably knows that better than you, and even if he doesn’t, he would probably make up his mind after just a short description. Save your time for your product and your team, which he doesn’t know.
- Argue in the first meeting – You are not going to convince a VC that she was wrong about something in a first meeting. Of course, also avoid being a push-over and agree with everything the VC says. If you get stuck on a point, move on to another point. Focus on the positives of your company.