VCs are good for much more than just their money. I have never gotten VC funding, but I have had many VCs help me.
VCs might get criticized for their lack of domain knowledge, but they have great general business knowledge, and a VC’s BlackBerry can be a distribution channel in itself. The tricky part is charming them into helping you. These steps will help you navigate your way into new worlds and go from outsider to VIP. Think of this as life-hacking and accelerated networking.
1. Set Aside Your Need for Short-Term Investment
You’re not going to get venture money right away, so set aside your short-term cash needs. Clarify this position verbally with the VC. Once you make it clear that you don’t need short-term venture, you then have a shot at getting mentorship because the relationship is mutually beneficial.
The VC benefits because they get to know you without the awkwardness of you selling them on you. Plus, they get to see you outside of your qualifications as a good Computer Science major: Can you execute your way out of a wet paper bag? Can you take mentorship to improve your fledgling startup? You benefit because you are getting free consulting and are building shareholder equity.
Money comes out of a VC when their greed for your startup stock outweighs their fear of investing. Get more of the former and less of the latter by setting aside your need for their cash.
2. Get a Foot in the Door
So how do you get started and wedge your foot in their door for a meeting? I get a foot in the door by not even stepping into their office. My opinion: The cardinal sin of entrepreneurship is asking a VC for coffee. Be a pro and ask for phone time. To you, coffee takes only 20 minutes, but to a VC, it’s different. The VC sees it as over an hour of time. It takes 30+ minutes door-to-door from Sand Hill Road to the University Ave. Peets Coffee in downtown Palo Alto.
3. Follow Up in a Methodical and Diabolical Fashion
VCs ignore you. This isn’t a plot spoiler, because everyone knows it already. They do want to talk to you, but they are going to test you first. I recommend following up in a stalker-ish manner. It’s what they don’t teach you in school. Diabolically set up an email contact schedule after first contact.
For example, you first come into contact with Jim Breyer at the Accel-hosted CEO Summit at Stanford’s Arrillaga Alumni Center. He hands you a card, fully knowing that as the legendary Jim Breyer, you will only have a 15 percent likelihood of contacting him. It’s because people do not follow up. So let’s say that you are part of the 15 percent that do email. Most email once.
VCs like Mr. Breyer need to be put on an email contact schedule. Email him at strategic times:
- first thing in the morning at 7:20 a.m.
- sometimes on a Saturday
- maybe during late evening
It’s an impressive skill to email and re-email in such a way that each email is a stand-alone, first-time communication that is slightly new and different. You never ever refer to the other (unanswered) emails. Each email is a new email.
After about 20 emails, he’ll know that you are serious, and he will answer. But know that those 19 emails leading up to the one that does get answered were not in vain.
4. Google News Alert Them
Googling a VC is par for the course. Google News Alerting them is genius. Nothing gets the attention of a VC faster than an email message alerting them that their name was newly published to the web.
In San Francisco magazine’s Angel Issue, it noted that there is no more self-promotional group of professionals than angel investors. A Google News Alert, of course, is when Google notifies you that your name just appeared somewhere on the web. VCs will have alerts set up for their names.
Post a blog article or public thank-you when a VC helps, mentors or introduces you to someone or something, and the VC will get an email alerting them. VCs might skip your email the first couple of times, but they will read your blog post ASAP if it appears in their Google alert. To quote my fictitious mentor, Ron Burgundy in Anchorman, “85% of the time, it works every time”.
5. How Exactly to Ask for Help and Feedback.
Let’s say you charm a phone conversation and get a meeting. The VC agrees to start mentoring you. Here is the anticlimactic result: A VC will give you seven ideas. Three or four will be total crap.
The mistake entrepreneurs make is to start judging which of the seven you do. Address all seven in a way that you did back when you had your corporate job where every recommendation needs to be addressed and investigated. Address all seven in a way that is similar to when your CS professor redlined your code.
6. Add Fuel to the Mentor Relationship
I use the email update to address the ideas. Every granular recommendation gets its own email subject line, for example: Larry Chaing / demo at FashionWeek / follow-up. I write:
I tried to bark up that tree, but it turns out it’s expensive. I don’t think it’ll work. I like your idea but am back-burnering it for now.
VCs want proof that you can execute. In lieu of real proof, an email update at least documents that you heard the recommendation, wrote it down, took a little action and followed up.
This fuels the mentor relationship because the VC gets satisfaction knowing that even the crappiest of her ideas were heard. You want the VC to say, “Man, I wish the other CEOs in my portfolio companies followed up like Larry Chiang.”
7. Close Them for a Commitment: A Cell Number
I calibrate and litmus test where I stand all the time. One tactical method is to ask for a VCs cell phone number. If they say, “Just email me. That’s the best way to reach me,” then you know where you are: with the herd.
If they say, “Don’t text or call me unless there’s an emergency,” then voila: You are text message friends. Congratulations !
8. Be Copy-and-Paste-able
You want a VC to parrot what you say. There is no bigger compliment than a VC hijacking your “expertise” and copy-and-pasting it as his own thought. Parroting is observed here in my article about the types of VCs you don’t want to meet. Remember it isn’t what you know or who you know. It’s who knows that you’re an expert and is willing to promote you as that expert.
Larry Chiang is CEO of Duck9, a service that helps college students improve their FICO credit score. He has testified at Congress and World Bank on credit. He is the author of the book What They Don’t Teach You at Stanford Business School, inspired by Mark McCormack’s What They Don’t Teach You at Harvard Business School. He’s currently working on a sequel, What They Will NEVER Teach You at Stanford Business School, which will be published in 2011.
Image courtesy of Flickr user Ben Fredericson (xjrlokix)
