By Fernando Berrocal

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Starting a business is a complex process–many founders aim for success through the assistance of venture capitalists (VCs).  Securing a meeting with VCs is a difficult task, and the presentations they ask of founders and CEOs are no easy feat, either.  However, these meetings are essential for the establishment and growth of a startup.  It’s crucial to be prepared for pitching your startup in venture capital meetings.  You must ask yourself questions like: what is a VC meeting? What is generally discussed in VC meetings? How can you get the most out of your (little) time with such powerful individuals?

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In this post, we'll examine what goes on in VC meetings, and how startup founders might approach an investor successfully.  Also, we will see what entrepreneurs should anticipate at an investor meeting–and how to make sure you’ve completed your research before showing up.

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Venture capital sounds complex, but it is simply a type of financing.  Most, often, investors offer it to startups with the expectation of long-term development.  The first rule of venture financing is that every VC meeting must be followed at least by another meeting. VCs won't attend many meetings if they have little possibility of becoming investors. Unlike regular sales, where the objective is to close the deal as quickly as possible, VCs are constantly seeking to evaluate investments. They simply follow a procedure for doing it. To properly manage each phase, founders must comprehend the basic flow of that process.

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As a startup entrepreneur, it is crucial for you to try and step into the mindset of a venture capitalist.  VCs, like all professionals, have a job to do and a certain number of meetings to attend. When a venture capitalist meets a founder or entrepreneur, the first thing they do is decide if they want to have a business meeting with you. A typical VC conducts meetings with around 100 individuals out of every 1,000 people they meet. After that, at the end of the year, they usually only invest in 1 to 5 startups. This means that more than 90% of the time, they won't even meet with you.  Moreover, the likelihood of investing in your startup is slim.

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So, how do venture capitalists choose whether to go to a meeting? Since every investor is unique, most VCs don't adhere to a set procedure. Believe it or not, they tend to act on impulse. The following list goes over some common values of venture capital groups; by focusing on the areas VCs tend to emphasize, you have the best shot at delivering a knockout pitch in front of these startup investors.

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• Briefly describe the business work that your organization undertakes. Your catchphrase and/or short pitch play a significant role in the fundraising process of the startup. This specific term will serve as the cornerstone of your narrative to your consumers, your current and future employees, and your investors. Your firm is built on language, and how you communicate about it will depend on your short pitch.

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• VCs frequently question startup founders with this question: "How can you generate more money?" They frequently hide this information in protracted decks and in-person business presentations. So, it is crucial to define the client precisely and demonstrate your point of view to investors–and your available data. How can you make money? Which pricing method have you adopted? Remember to demonstrate your thought process without being overly directive; this will boost your chances of gaining a meeting.

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• You must demonstrate the existence of a market opportunity for your startup; and the reasoning behind yur estimate of its potential size. Some investors are more fervent about particular markets than others, since they tend to be focused on the market they enter the most. It is crucial to demonstrate that you have considered the specific market and have a strong case for why you think there is an opportunity.

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• A strong startup team, which typically consists of the startup founder, a Chief Executive Officer (CEO), and a Chief Technology Officer (CTO), is crucial for businesses that are just getting started. Investors will be especially curious about the individuals who comprise your leadership panel. Your prior achievements might provide insight into your greatness in both your experience in both studies and work life. All of this will aid you in proving your business competence to potential investors.

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• Your chances of gaining a meeting will rise if you present a compelling argument for the timeliness of your business. VCs have probably heard of concepts like yours, so substantiating how your startup takes advantage of timing will serve as a positive influence.  Even if venture capitalists are unfamiliar with a comparable concept, providing a scheme of timing along with your startup idea might influence their decision to meet with you.

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• The majority of VCs want to invest a certain amount of money into a startup. Therefore, they'll be interested in learning what your goal investment is. If you fall outside of this range, a VC won't meet with you as there is typically a "sweet spot" for their investments. Meetings with other VCs who are prepared to invest your desired amount should take precedence. It may be an excellent incentive for them to meet with you if their fundraising goals align with your incentives. Investors will also be curious about your fundraising history. It serves as social proof, a measure of your pace, and a way for investors to see how well you have utilized prior money.

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• Distinct investors might benefit your business since they have different personalities, abilities, and knowledge. It's crucial to examine each investor and comprehend why you believe they are a good fit for you (since you could find certain VCs to be more suitable). VCs need to understand how you choose them, too. This enables them to comprehend the sort of assistance you could require in addition to financial aid.

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Ready to bring your startup to the next level? Apply to MassLight’s next batch. MassLight supplies capital and a dedicated tech team. We take equity in return. Have questions? Refer to our FAQ page.