February 22, 2017
Many entrepreneurs will recognize this scenario: You finally get a meeting with a big-name VC partner. In preparation, you spend a week polishing your deck, financial model and pitch. Then, you get to your meeting and the partner is 20 minutes late. Plus, they run meetings on the hour, so now you have 40 minutes to squeeze everything in.
As you start running through your pitch, the VC looks on, at best, half interested. As you’re wrapping up the VC says something like, “your business is not a current fit for their fund” or “it’s too early and you should come back with some traction.”
Then something might happen to a first-time founder. Just as the VC is passing on your deal, they start dropping names – they happen to know the VP of Cloud Services at Google, an editor at Vogue, or some other relevant contacts that could be partners or clients to your business.
This comes from the genuine desire to help founders, regardless if they will invest or not. If you’re putting everything into your company, and VCs will want to use their network to help. For all the times they offer relevant introductions to entrepreneurs, the percentage of founders who take them up on this offer is far too small. Here’s why entrepreneurs should not overlook this opportunity for help:
Follow Through and Build Your Relationship
Hustle is one of the most crucial qualities of an entrepreneur can have. Even if a VC says they’re not going to invest right now, an offer to make an intro is the perfect chance to demonstrate a level of hustle right off the bat. How are you going to overcome the many hurdles that stand in the way of a startup when you can’t even capitalize on an intro handed to you on a silver platter?
Some investors use this as an implicit test. So follow through, and you’ll pass. If you take the time and effort to follow through on the investor’s connections, you could turn these introductions into relationships, or even pilot customers and business partners. This, in turn, could bring a great investor back to the table and possibly push them over the edge to invest in your business.
Smart Business Development
The relationship with your investors is key. Any investor who offers introductions offhand and then can’t follow through is probably an investor you want to avoid. Either they’re overstating their connections, or they just aren’t very helpful. Either way, it’s a sign that they won’t be a very supportive (or trustworthy) investor.
It’s hard to get introductions to potential partners and customers. After all, you’re running a startup and can’t afford a sales team. However, through VC introductions and due diligence it can lead to tons of great connections, usually directly to company founders.
These introductions from investors serve as one of the best ways to build relationships with them, as well as a subtle form of due diligence of you and your company. Don’t overlook them and don’t forget to follow up. Because if you over-deliver on these intros, you’ll see that many investors will get excited to be a part of your startup.
This article is courtesy of Techstars, the best global ecosystem for entrepreneurs to bring new technologies to market. From inspiration to IPO, Techstars empowers the world’s most promising entrepreneurs throughout their lifelong journey by providing a global ecosystem made up of tens of thousands of community leaders, founders, mentors, investors, and corporate partners.
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