

Ask HN: A VC wants to talk to us, what to expect? - jread

I've been working on a bootstrapped startup for about a year (applied but turned down for the last YC class). Like most founders, I think it is a great idea and I've continued to work at it because it's something I enjoy doing. Recently we've gotten some traction with a conference invite, some press exposure, and a couple of paying clients due to research we conducted and published on our blog.<p>Yesterday I received an email out of the blue from an investor at a large VC who is interested in speaking with us. I've never spoken with a VC and am a bit nervous about it. Could anyone tell me what to expect in terms of questions they might ask and generally how I might prepare for the call. Thanks!
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gyardley
First, don't be nervous. You've got some publicity, you've got paying clients,
things are going well and will continue to go well if you have this call or
not.

Second, only raise money when you're ready to raise money. I'd make it clear
from the start that you're not raising at the moment so the VC doesn't
interpret your conversation as a week pitch. Tell the VC that when you're
starting your fundraising process you'll naturally get in touch with them.

Third, who's actually calling? Is this a partner or is this an associate?
Associates are often just gathering information about areas they think might
be interesting - they're just looking to get educated / educate their firm,
and they figure you'll be willing to help them out for free. Sometimes
associates are doing due diligence on a potential investment by calling up
competitors and seeing if they say the same things about the market.

In general, the conversation won't be that technical. They'll want to
understand what you do at a high level, get your opinion on the size of the
market you're in, figure out if you're going to need to raise, figure out how
you're making money / plan to make money, etc. Don't feel compelled to tell
them anything you wouldn't be comfortable telling everybody.

Also, it's a two-way street! Ask them a ton of questions about what they're
doing, which companies they've been looking at, what they think of your
market, who they think your competitors are, what challenges they think you'll
face - take everything said with a grain of salt, since you know your business
better than they do, but sometimes you can glean interesting bits of
information that way.

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jread
Thanks this is very helpful information. He introduced himself as an
"Investor", but his linkedin profile shows his job title as an analyst. I'm
guessing that is probably at or below the associate level.

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tworats
Analysts are like scouts for VC firms - they're assigned or decide on a
vertical, then talk to as many companies as they can in that vertical.

If the analyst likes what he hears you may get a shot at the partners who
actually make decisions.

He'll ask as many probing questions as he can to try to really understand your
business. Keep in mind that he likely will be talking to everybody in your
space and may well be funding a competitor. Don't let the excitement of
talking to a VC lead to sharing information you'd prefer to keep confidential.

My advice is:

\- Ask plenty of questions up front: what exactly is his interest, are they
actively looking to invest in this space, what is their typical investment
profile, who else are they talking to, how did they find you, what made them
interested in you, and so forth.

\- Keep it brief. Give enough to show you are serious and have real traction,
but don't get overexcited and go overboard.

\- Spend as much time showing why your team is worth investing in as you do
showing off your business. Early stage investing is mostly about team, so do
your best to show you're dependable, committed, and get things done.

\- Your goal is to get a meeting with a partner. The person you're talking to
is not a decision maker, so all you want from this conversation is to get
another conversation with one of the decision makers.

Good luck, and if want to chat further leave an address of some sort and I'll
get in touch.

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Elite
I would have a cogent answer to where you see the company going. You need to
be able to convey a realistic vision of the company's goal and the path to
getting there. And that destination needs to be large enough and lucrative
enough to justify a minimum VC investment.

You may have a team of talented hackers but if you don't have this vision, you
could very well end up hacking away at a product which fails to grow b/c your
actual market size isn't big enough, you're target customers don't need your
product, or they don't want to pay for it.

So you'll need a justifiable answer to your market size and who would actually
open up their wallets to pay you.

Lastly, don't bullshit him/her. VCs see through this pretty easily, so be
confident in what you know, and honest about what you don't.

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towndrunk
Sure would be cool if you had c based tools (c, c++, objective-c etc) and a
user interface toolkit to go with it for Android development.

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towndrunk
Not sure why I was down voted on this but if this were the case it would be
easier to port code between the iPhone and Android. Currently, it is a total
rewrite which sucks quit a bit.

