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Updated September 15, 2023You’re reading an excerpt of The Holloway Guide to Raising Venture Capital, a book by Andy Sparks and over 55 other contributors. A current and comprehensive resource for entrepreneurs, with technical detail, practical knowledge, real-world scenarios, and pitfalls to avoid. Purchase the book to support the author and the ad-free Holloway reading experience. You get instant digital access, over 770 links and references, commentary and future updates, and a high-quality PDF download.
You may already have a relationship with the first VCs you meet with, but chances are you’ve never met. The purpose of this meeting is to get to know each other. The investor goes into this meeting wanting the answers to these questions: Who are you? What are you working on? Is this interesting enough for me to meet with you again or introduce you to more people at my firm? The founder will go into this meeting for the chance to introduce themselves and their company, and to get to know the investor and learn what they’re interested in working on.
The first time you sit down with an investor can be intimidating! Especially if this is the first round of funding you’ve tried to secure. But don’t be worried. Think of this meeting as an opportunity for you to evaluate the investor as well. You both want to be able to walk away excited by the prospect of working with each other.
This will depend on the person you’re meeting with, but the first meeting is usually at a coffee shop or restaurant, though it may be at their firm. If you’re raising pre-seed, chances are you’ll be heading to neutral ground. (Angel investors and early-stage investment firms might not operate out of an official office space!) You’re likely to get an email that says, “I’m working out of Buck’s of Woodside today, why don’t you come meet me there.”
So be prepared to have a conversation anywhere, without access to some big presentation software. Remember, a formal pitch is not the purpose of this meeting!
Bring your laptop with your deck ready. This is not a formal pitch meeting, and you should not bring up your deck and start moving through your slides when you sit down. But you might have a statistic, picture of your app, or a graph or chart from your deck that you want to show the investor. Your deck should always be an aid, not a crutch. You should have practiced enough that you can picture your deck in your head to make sure your narrative stays strong, but you can still bring out your deck if a certain slide will be extra helpful for the investor to see.
At the meeting, ask the investor what you’re interested in learning more about. You’ve done your research, so you might have a list of a few questions about their background and interests. When you sit down, simply asking, “How’d you get into venture capital?” is usually a safe place to start.
At some point, the investor will say something like this (or exactly this): “So tell me what you’re working on.” You’ll start with your elevator pitch. From your first email, the investor will already know a little bit about your company. But remember, they meet with a lot of founders, so cut them some slack and reiterate the basics: what problem are you solving, and why your team is the one to solve it.
If the firm is thesis-driven (that is, they only invest in companies in a certain sector, companies solving a specific kind of problem, or companies with founders from certain demographics), you’ll want to make it clear why you and your company are a good fit for their vision. This should be clear enough in your first email, but hitting hard on fit in this meeting will also show the investor that you’ve done your research. You might say something like, “I’m excited to be meeting with you because it’s really important to my team that our investors and board members are as devoted to solving the climate crisis as we are. When looking at your portfolio, I saw that you didn’t yet have a team working on desertification. The technology we’re developing for remote communities to measure erosion would be the first of its kind and would have huge implications in this sector.”
important Pay attention to visual clues. The investor should be thoughtfully skeptical as they ask questions. That’s a good sign, not a bad sign. If they thought your idea had no merit, why would they bother asking anything? They might not ask anything too deep at this stage—the whole point is to get to know you—but make sure you’re prepared to answer questions about your market, distribution, and finances, in case the investor is really zealous.
Founders should be looking for verbal confirmation that the investor wants to meet again. If they’re interested, they’ll tell you. “I’d love to learn more, let’s meet again next week,” they might say. If it’s a pre-seed firm, it might be a really small team, and this is the only person you’ll be meeting with. But if they want to move forward, it’s likely that they will invite you to meet with more members of their team. They might ask to see your deck. “Hey, I’d love to learn more, can you send me the deck so I can dig in, and we’ll meet again next week?”
The investor could set a date with you for a second meeting right away, but they will likely keep the follow-up general.
The VC might do some basic digital research, some casual due diligence, on your background, the company, your industry, market, and competitors. This depends on how much they already know about these things; if they’ve worked with companies similar to yours in the past, they won’t have as much research to do. The VC might start to ask around, too. They might say to other investors, “Hey, have you heard of this company? Do you know anyone who’s worked with this founder?”
If they didn’t set a date with you for a second meeting while you were still at your first, you can expect an email within a few days. If they really love you, they might ask to meet you again the very next day. For most people who get a second meeting, it’ll be a week or so later.
The second meeting you have with an investor can have a few goals. This second meeting could be casual, or it could be around a conference table, where you’re repeating what you said in your first meeting to more people. An investor might be thinking, “I just want to know more so that if I do say no, I know I’ve done my research.” Or they might tell you, “I want you to come in and pitch this to four other people.” In the latter case, hopefully, the VC you’ve already met with becomes a kind of sponsor for you at the firm. The investor who’s sponsoring you will tell you what to expect. She might tell you a few things about the other people you’ll be meeting, like, “John’s enthusiastic, Ella is skeptical.” They will tell you to come in and pitch your deck or just to repeat what you said in the first meeting, and they’ll tell you how long the meeting will be.
If the investors want a third meeting, things are getting pretty serious. If you haven’t met with partners at the firm yet, you will now (these would be “partner meetings”). They’re thinking, “Alright, we’re really interested, we think we want to make a deal. We’ve done our research, and now we want some answers to a few questions we can’t answer on our own. Like, “How are you thinking about X company as a competitor? This is the issue that’s kind of outstanding for us.” Your job is to convince them you’ve thought of everything. If you’re coming in to the firm for a third meeting, your sponsoring investor will tell you what to expect. If you haven’t delivered a formal pitch yet, you will now.