MANAGER MINT MAGAZINE Issue 02 | Page 44

This is a stenography from one of the latest episodes of This Week in Startups. Jason Calacanis features the esteemed investor Jed Katz; he explains how to (and how not to) correctly interact with investors and achieve funding.
I found this talk very useful because it displays the inside thought process of investors, and it shows how they decide on who they will fund. It is particularly relevant for me because down the road my startup may need venture capitalist funding. I think anyone who is thinking about raising money from a firm will find this information useful.
I tried my best to condense the talk into a readable format. I altered some words and omitted/rearranged sentences for sake of readability. If you want to listen to the podcast click here. Katz talk is around 40 minutes. The speaker after is Kyle Hill, founder of Homehero; it is about company culture, and it is also very good.
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This is going to be a boring but practical talk. These are a bunch of pointers on pitching series A funds. What you should be thinking about. What the investors are going to be thinking about, and things that will make a difference.
[We will be going over] personal traits, choosing who to talk to and how to connect with them. Deciding how much to raise. What you need to show to get to a yes.
We will also spend some time on avoiding things that will lead to a quick no. Although a quick no is better than a no that takes forever to come your way.
The goal of the first meeting is to get a second meeting. That is all you’re trying to do in the first meeting of series A. It’s not like a seed meeting where someone might write a $50,000 dollar check after a half an hour of talking. You’re trying to get a second meeting. You’re trying to avoid a no. You’re trying to get the investors intrigued by yourself as a founder and your product, market size — all the things that are important to them.
Generally you will try to determine if there is a match between the two groups. Will your team work well with the investors? The goals of the first pitch is not to cover every detail about your business, they will not want to know every detail. The true details will take several meetings to get there. They want to know the most important things to either arrive at a no or spend more time on you.
The investor should see you as a great communicator; you need to be able to tell a story that wakes them up.
Let’s imagine that it is 2 o’clock in the afternoon. They just had lunch, they are tired — you need to get their attention. You need to be a good listener as well, they are going to give you feedback along the way and question you. The more you represent that you are hearing what they’re saying, and that you are going to apply it the better.
Part visionary part operator: you can’t be a hundred percent forest and hundred percent trees. The vision for what you want to accomplish is really important. But you need to convey that you can execute, that as an operator you can actually succeed.
Something that is very important at our firm is that your data focused. Your metrics focused. You study what goes on in your business. You can iterate along the way. The more you show that to us the more that will trust your abilities.
We look for founders that are sophisticated and capable. That doesn’t meant that you are forty-five and this is your fifth startup, it could mean you are twenty-two. But you have a way of handling yourself. You’re going to be able to have conversations with future potential investors. You’re going to have biz dev conversations that will result in deals.This is not about your age it is about your abilities.
Intellectually honest transparent: if we think your bull-shiting us at all, trying to sell us, or hiding from things it is just never going to work. If there is something that you’re still trying to figure out, and you don’t know, or there is something that your competitor is doing — get it