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04.12.2022
Investors are multifaceted professionals by nature
On the same day, an investor could look at 3-4 completely different companies.
Not only do they see potentially hundreds of companies a week, but looking at deal flow is the tip of the iceberg of what an investor does day-to-day.
This can be anything from:
-Portfolio work
-Internal politics
-Thesis research
-Attending events
-Speaking at events
-Fundraising for the next fund
As you can see, investors don’t have time to understand complexity.
All they want is clear, simple reasonings for why they should be spending time with you.
They will always meet you with a base knowledge of your industry.
They will never know as much as you do.
So make sure you understand that you are the expert in the room.
Great founders can make an investor understand their complex industry/problem.
Investors have to invest in a lack of evidence.
There is one constant in investing: you will always be investing on a lack of evidence.
No matter the company, there is not enough evidence in the world to show whether a company will 100% succeed or not.
Investing is therefore inherently risky. A bet.
But investors need to find conviction in something.
That something is usually the founder.
And the belief that they will succeed in the future.
Your goal is to make sure an investor believes you will succeed by showing:
how you build (execution)
why you build (passion); and
what you’ve built so far (traction)
Investors rarely actually invest in something
For Seed - Series A investors, they will be leading on 1-3 deals a year.
The unlucky ones may go a whole year before they find a company that is good for their fund!
Think about that for a second…
Within 12 months, investors know that they will have a small number of shots to show why they are great investors.
It’s why they are so adamant about the best. They have to nail it.
Otherwise, they may have to wait a whole 12 months before they can find another one.
Your goal is to make them think you are the best company they’ve seen this past year. And that the opportunity is so big they’d be silly to pass on you.
Investors expect every company they invest in to return their funds.
Investors expect every single exit to return the rest of their investments.
If you can’t be big, you aren’t worth the risk.
You should always be thinking big. $1 - 10bn at least. Show the simple steps of how you get there and why you will return their fund.
A VC’s job is to explain companies internally to colleagues.
When raising a VC round you will have one person in the fund who will be leading. This will most likely be the first person you speak to in the intro call.
At my fund, we called these “champions”. These champions will be your internal messenger within the fund.
The VC's first job is to make tell their colleague why they should meet you.
If the champions cannot understand how to explain your company to their colleagues in an easy manner this looks bad on them.
This is why it's important to ensure an investor truly understands what you are doing at the end.
Give them the tools to make their colleagues want to speak to you, without you in the room to help.
On the same day, an investor could look at 3-4 completely different companies.
Not only do they see potentially hundreds of companies a week, but looking at deal flow is the tip of the iceberg of what an investor does day-to-day.
This can be anything from:
-Portfolio work
-Internal politics
-Thesis research
-Attending events
-Speaking at events
-Fundraising for the next fund
As you can see, investors don’t have time to understand complexity.
All they want is clear, simple reasonings for why they should be spending time with you.
They will always meet you with a base knowledge of your industry.
They will never know as much as you do.
So make sure you understand that you are the expert in the room.
Great founders can make an investor understand their complex industry/problem.
Investors have to invest in a lack of evidence.
There is one constant in investing: you will always be investing on a lack of evidence.
No matter the company, there is not enough evidence in the world to show whether a company will 100% succeed or not.
Investing is therefore inherently risky. A bet.
But investors need to find conviction in something.
That something is usually the founder.
And the belief that they will succeed in the future.
Your goal is to make sure an investor believes you will succeed by showing:
how you build (execution)
why you build (passion); and
what you’ve built so far (traction)
Investors rarely actually invest in something
For Seed - Series A investors, they will be leading on 1-3 deals a year.
The unlucky ones may go a whole year before they find a company that is good for their fund!
Think about that for a second…
Within 12 months, investors know that they will have a small number of shots to show why they are great investors.
It’s why they are so adamant about the best. They have to nail it.
Otherwise, they may have to wait a whole 12 months before they can find another one.
Your goal is to make them think you are the best company they’ve seen this past year. And that the opportunity is so big they’d be silly to pass on you.
Investors expect every company they invest in to return their funds.
Investors expect every single exit to return the rest of their investments.
If you can’t be big, you aren’t worth the risk.
You should always be thinking big. $1 - 10bn at least. Show the simple steps of how you get there and why you will return their fund.
A VC’s job is to explain companies internally to colleagues.
When raising a VC round you will have one person in the fund who will be leading. This will most likely be the first person you speak to in the intro call.
At my fund, we called these “champions”. These champions will be your internal messenger within the fund.
The VC's first job is to make tell their colleague why they should meet you.
If the champions cannot understand how to explain your company to their colleagues in an easy manner this looks bad on them.
This is why it's important to ensure an investor truly understands what you are doing at the end.
Give them the tools to make their colleagues want to speak to you, without you in the room to help.
