There are five strategies for discovering the ideal VC partner for startups despite uncertainty, spanning conducting research, a warm introduction, and boosting PR activities.
Heaptalk, Jakarta — The pandemic has changed multiple aspects of business, including the way startup capital is obtained from venture capital (VC). Now, most of the assessment processes for obtaining injections of funds occur online.
Since most investors invest in people, not companies, digital presentations often complicate for that brilliant personality to appear, according to the CEO of Qorus Software Ray Meiring as quoted on Startup Nation. The pitch should be to the point with a clear and concise executive summary. In addition, the business plan must be detailed in an attractive presentation by making a compelling case for investing.
Although investments have shifted in many ways, startups still have a chance to thrive with the support of venture capitalists. Ray Meiring shared five strategies for discovering the ideal VC partner for startups despite uncertainty, spanning conducting research, starting with a warm introduction, boosting more PR activities, attending networking events, and working up game plans for every occasion.
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● Conducting research
VC firms do much more than provide the necessary funds to get a startup off the ground. They can also offer strategic advice, operational expertise, market insights, and a network of connections that might help accelerate a startup’s idea into a viable venture.
Conducting research will help startups to know which VCs to target with a focus on firms that are most likely to share the same vision. Another thing that is important is to look for VCs with a record of investing in the same market sector, stage of the company, or geography as the startup.
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● Starting with a warm introduction
VC firms receive many emails touting investment opportunities, most of which would probably be ignored. To increase startups’ chances of getting noticed, Ray Meiring advises founders to start with a warm self-introduction.
A warm introduction can help to improve reputation and later can strengthen the founders’ character. Starting with the strongest relationships that startups have, founders should explain exactly why they are seeking introductions without making a pitch. If there is no favorable feedback, founders should move on to the next shared contact.
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● Boosting more PR activities
Good publicity around a new company is never a bad thing. When used properly, positive attention helps build credibility and can get the startup covered by the media. Founders should do more public relations activities by spreading the word about startups.
Founders can create content that tells their story and consider what is newsworthy about the business. Why should people care? What valuable insights could the startup share with potential readers? Remember to come up with facts and figures and discuss them with the team.
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● Attending networking events
Startups can spread networking and establish relationships that may pay off later down, particularly with junior corporate VC members. When attending conferences, including virtual ones, founders should introduce themselves to the analysts at the target VC firm.
They may be junior members of the investment team, but they will often have the most time and interest in listening to unsolicited investment opportunities. In addition, founders can also share materials, spanning executive summaries, cover letters, and other marketing collateral, with the junior members.
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● Working up game plans for every occasion
Startup founders should know that VCs plan investments well in advance, sometimes up to 24 months. Therefore, founders must understand burn mechanics in the sector. What amount of capital will generate positive cash flow from the startup? How does the startup break out costs? Founders need those numbers and financial models at the ready should a request come in.
