Most founders fall You fall into a very common trap. A good result from a previous investor does not mean that a new investor believes in you. This new cohort has never seen its performance in person and there is no reason to trust you yet.
As a founder approaching your next round, you often wonder, “How can I make this new investor group trust me to do?”
In our experience, successful founders are good at building relationships, and they usually offer what we call “pre-pitch.” This is “We are not really looking for money. We just want to be friends for now.” A pitch that attracts the attention of investors. When you raise the next round, you’re much more likely to answer the phone because you really know who you are.
But the concept of pre-pitch doesn’t just make potential investors aware of your presence. To build relationships with potential investors in the future, you need to think like a marketer, not like a founder. Much of the hard work in a relationship occurs long before the time to seek capital commitment.
If investors trade in your space, they are likely to know the early investors who may be right for you today.
The pre-pitch approach has many advantages.
- Good habit: You are not looking for money. Instead, it offers a sneak peak. Relationship builders don’t have millions of lines in their pre-pitch, so they’re always less anxious and lead to better relationships. Remember: Who cares if it doesn’t fit well?
- Candid Feedback: When you’re not asking for money, you’re more likely to get honest feedback that you might not get in a high stakes environment.
- Set a baseline: You need to make sure you’re where you are, why it’s not really time to raise money (the opposite of “why now”), and what you still have to achieve until the time comes.
- Performance-based trust: Put your performance in your mouth by showing you the potential investors you are in and what you expect to do in the short term. Later, you can prove to them that you have achieved what you want.
7 Ways to Build Relationships with VCs
Now you’re probably wondering, “What the hell are you saying to build a good relationship with investors in the next round?” Here are some caveats on how to approach pre-pitch:
Seek relationships, not money
Admit that it’s early, but later tell them that you think it might be appropriate. Please state in advance that you are looking for a relationship and want to know if you can ultimately get along with each other. Don’t sneak into the question. Let the relationship bloom organically.
Here is an example: “I haven’t actually procured it yet, and it’s probably premature. But I think this may be of great interest to you, and reach out, open relationships, and be appropriate. I thought it made sense to see if it was. “
Don’t waste your time
7 ways to build relationships with VCs – TechCrunch Source link 7 ways to build relationships with VCs – TechCrunch