VC Insights - A summary

Allen Morgan, one of the General Partners of Tier 1 firm Mayfield, has just finished his "10 Commandments" series of posts. Any first-time entrepreneur planning to seek VC financing at some point will find worth reading and reflecting on Allen's interesting insights. I always say in such circumstance that no one should take "VC Do's and Don'ts" literally because each startup and each fund are particular. However Allen's points are often practical, and sometimes candid, and can be applied to many (first timer's) situations. Here they are:

1. Do your homework, and contact the right person
   
2. Be on time
   
3. Tease, don't overwhelm
   
4. Know your audience
   
5. Create the "Aha" early
   
6. Explain the idea by analogy to, or contrast with, older ideas
   
7. Go with 13 or less slides
   
8. Know what you don't know -- and admit it
   
9. Be like Goldilocks, when it comes to competition
   
10. Control the meeting -- but be smart about it

Congratulations to Allen for taking the time to put these thoughts "on paper", they are a great complement to Brad's own contribution on clarifying financing terms that are found in typical US termsheets.

I should also have mentioned the three part series on "Saying No" that Bill Burnham has recently published. Why ? Because it is critical for entrepreneurs to "read" through Yes, No's and Maybe's. Ross provided the entrepreneur perspective with which I agree. A VC who provides honest feedback and timely follows up on his commitments is someone who will get dealflow from me, over and again. That does not mean that I will not bring my clients to "the others", but when you have a pool of VCs who could equally well support a given deal, it is easy to decide who will be seeing it first.

And for the sake of balance, you can read Jason Calacanis' account of a "VC Associate Cold Call" (which I agree very rarely lead to anything since they are meant to gather data about all companies in a given market), and Paul's amusing take on it.

Comments

[Accounting Software Guru]

I went to a Angel Investor meeting not so long ago, and found the whole experience to be very helpful in learning what works and what doesn't. At that level, you have to really impress to get the funding. Some of the companies presenting had full-time employees that just went around the US participating in these events. You really need to have your presentation down. I agree with the 13 slide max. That is really enough. Don't slam the slides with too much info, and make sure that people in the back of the room can see. Remember, you are just teasing the audience. Get them to get the details after the presentation!