There are 3 important points that need to noted during collaboration with various venture capital (VC) companies:
- 10 — Investors decide to invest or not in the first ten minutes at the first meeting.
- 5 – Less than five percent of startups will get funding from a VC.
- 1 – CB Insight research shows that only one percent of startups that get funding will become a unicorn. according to CB Insight.
So what kind of personality and team elements will make VC see your company as a future unicorn? Here are 6 things you should do and don’t when meeting potential investors for the first time.
1. 3 is a gold number
Most of the investors I invited to discuss claimed to feel more comfortable giving their money to a team of three startup founders.
Why is that? They think four people are very many. Think about the number of opinions, difficulties making decisions, and reaching agreement. Meanwhile, a team of two people is also very small considering the amount of workload to be faced. On the other hand, the presence of a single founder will also arouse investor suspicion that you have a problem regarding teamwork, delegating work, and sharing victories.
2. Long-term relationships and old acquaintances
Investors wouldn’t be happy to hear you just met your co-founder at the meeting the night before. Making the decision to do business together with someone you just know shows a lot about how you make judgments. In addition, investors also doubt you can create a strong team and successfully manage a solid work relationship. Try holding a trial period of cooperation before committing or signing a contract with a potential co-founder. Share this story with investors. This step is a fairly effective move for validation.
3. Confident and show your enthusiasm
Imagine potential investors as your best customers. Will you come with sleepy, moody, or bored in front of potential customers? Of course not! Enthusiasm, confidence, and excitement are contagious. Besides proving to investors that you can bring amazing energy during the sales process, you also have the opportunity to show enthusiasm through your product.
4. Show attention, do not argue
When investors give advice, tips for improving your product, or new ways to see a problem that is being faced by your product, it also includes a test. The way you respond to a suggestion tends to have a big impact on your chances of progressing. The investor wants to see if you are open to input. So, thank them, appreciate their knowledge and experience, and finally promise to take these suggestions seriously.
5. Don’t lie
Investors actually have a hidden desire, so that their entrepreneurs are honest with them, but are willing to take shortcuts and take “manipulative” actions if needed. All entrepreneurs lie by increasing or glorifying all aspects of their new company with an excess portion. This is part of the game. Therefore, you must know that dishonesty will disrupt the agreement with investors. They don’t want to take risks with someone who is not honest with them.
6. What do you want to show from CV?
Advantages: Investors are happy to see indicators of excellence on your resume. This assures them that you are the best or better than others in certain fields.
Relevance: Tell a coherent professional life story, which will rationalize the company’s establishment in specific fields and industries, as well as the position you want to play.
Leadership: Even if your position at a startup does not require direct leadership skills (eg CTO positions), investors will usually think for the next few years, and try to assess your ability to lead a department in a large-scale company. So it is important to show your leadership experience in previous organizations or jobs (scouts, colleges, soldiers, etc.).
Remember, this meeting is also an opportunity for you to assess whether the investor is the person you want to work with for a long time. While you pay attention to your attitude, you must also be open to your experience with that investor and use it as a signal.