Have an idea but don’t have a dime to give it wings? You’re in need of a Venture Capitalist. But why would any such Angel bestow you with consistent funds and trust you with their money? How would they get to know you in the first place? Zero Startup Capital is the number one reason that big dreams wrap up and stay big dreams. So let’s address the burning question of the moment- How To Get Noticed By Venture Capitalists?
Why Finding the Right VC Matters
Experienced VCs may offer insight and can serve as operational partners too. Finding the right VC may help you find an invaluable resource- he may mentor you, be honest about what’s going on and help bring clarity to your venture’s current situation. Some investors are focused on how you are operating your business, while some give you much freedom and simply supply the capital. Many Venture Capitalists are those who once built their own businesses and achieved success-hence they understand the challenges and potholes of growing a venture. Some investors insist on decision-making powers.
Ways to Get Noticed By Venture Capitalists
What I have noticed is that VCs are always on the lookout for interesting startups. Here are a few ways to get noticed (and approached!)-
- Visibility in the Ecosystem- It is very, very important to be a part of Entrepreneurship Forums, Conferences, and turn up at Startup related events. There are always opportunities to interact with Investors through these. You should actively network, build and maintain those new connections. If you are a consistent participant during these events you may even get noticed by a VC!
- Visibility In The Media- The media catches onto anything new, happening and newsworthy! Be something of interest to the media and get coverage. Emails and phone calls of offers will follow!
- Request An Introduction- There’s almost no way to arrange meeting with an investor without going through a source. Here comes the power of connections in the Start-Up World. Being introduced warmly to a VC through a mutual friend or source definitely helps. You have to request (with utmost humility) but with a sense of urgency to introduce yourself to a potential Venture Capitalist.
- Request A VC For Leads- If you are at a meeting and get signals that the Investor likes the idea but does not seem interested enough to invest, you could ask him to suggest a friend/colleague/fellow Venture Capitalist who may like to invest. Leave no stone unturned.
Introduce Your Idea and Yourself
Suppose your networking bears fruit and you decide to go ahead and request an introduction – state your why with conviction. Your ‘why’ should be specific and concise. It must answer the basic question of what’s in it for them. Actionable When this gets relayed, there are chances of a better response. To understand who is a potential investor for your idea, you must research in-depth about the background and interests of a base of investors. If you are unprepared and say “Hey, I have an idea, who do you think would be interested?” it will turn off any source (even if they’re your friends).
Express Your Vision and Ambition
‘Pitch’ is probably one of the most used buzzwords worldwide currently! Simply explained, the pitch is how you package your vision and strategy to make it lucrative for a Venture Capitalist to invest in. But you see, Angels and Venture Capitalists are listening to pitches ALL THE TIME. Yes, I am not exaggerating. They are constantly meeting entrepreneurs- each one of whom want them to open their wallets up!
So, how and why would they give you the key ingredient to your soup?! Just a big idea is never enough. You must prove your passion and seriousness towards the project. Cut out empty talking and sycophancy- flattery will not impress them. Talk about your research and the groundwork you have already accomplished to make your business relevant or make your product indispensible to the audience. Support your big idea talk by mentioning what kind of team structure you want in place. Speak about the financing strategy you are looking for. Always, always talk about your growth plans. Venture Capitalists always have the long run in mind.
It’s Not All in the Pitch
We keep hearing that the pitch is the most important but a pitch not supported well enough with ideas and plans will be just another free lunch for your investor. Prepare to answer some tough questions. It is not a job interview-but hey, it may be worse. Catching cheques from the investor will require him having absolute faith in who he is giving it to! You may face rigorous questioning- to test both your idea and your personality. They will want to know if you have all the answers to make your business thrive. If you get traction and validation from your audience before hunting for funds, it may be interesting a Venture Capitalist. Accordingly you may also use this face as leverage to ask for a larger amount of funds. They are even keen to know who you associate with and who’s a part of the idea. If they find answers which are one of a kind, the battle is half won!
If you are starting up now, you are indeed fortunate. The wave of entrepreneurship is on a high in India. Reach out!