If you are a new startup entrepreneur, approaching a panel of venture capitalists will be one of the most pivotal moments in your career. The outcome of that experience largely depends on the preparation you have invested in your approach.
Recently, my business ventures took me to Texas, where I met with a successful investor. ?It was similar to my previous experiences except for one thing?there was no pressure. No posturing. No hardcore grilling. No suit coat. The exchange between us was completely relaxed, because he could see that I was well prepared and seasoned in the industry. I took the opportunity to ask him about investing, and his answers were insightful. Here are 3 things he knows that most entrepreneurs don?t.
1. They may not want to be on your board.
A common approach with investors includes an offer to sit on the board of your startup. In many cases, this is a great marketing tool. But for many investors, these various roles begin to add up. I met a longtime investor who sat on twenty-two boards.
?Most of the people you want to ask are busy,? wrote entrepreneur and venture capitalist, Mark Suster. ?When they?re first approached, it sounds exciting to be involved with a startup, and if they?re offered free shares ? why not? ?If it takes you a while to get going, don?t be surprised if you don?t get the attention you want despite their best intentions. ?Frankly, they don?t have enough skin in the game to warrant the time and energy.?
If the response to your pitch is flat, it may not be the idea but the responsibilities attached to the idea. When preparing your pitch to investors, consider asking the panel how many boards they currently sit. The one with the least amount may be the most receptive.
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