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When Wooing Potential Start-up Investors, First Impressions Count

    
Start-up Investors

This is a good time for start-up companies looking for investors. Venture capitalists invested $7.8 billion dollars in 1,005 different projects in the third quarter of 2013, according to a recent MoneyTree report, with more money being invested in software companies than during any other quarter in the last 12 years.

Start-up founders hoping to receive VC funds need to do more than have a compelling idea and an impressive business plan. Those are necessary, but not sufficient. Great personal chemistry between the entrepreneurs and the investors is the crucial ingredient that can make or break a deal. There's not a lot of time to establish that chemistry. As with other relationships where personal chemistry matters, founders must make a great first impression.

Meeting With Investors is Like Going on a Date

Because the personal chemistry with investors is so important, it is not surprising that many entrepreneurs compare the process of meeting investors to dating. People who make a terrible first impression on a date usually have little hope of redeeming themselves later. The same is true when founders pitch to investors. Founders need to prepare themselves to do things right the first time and should avoid making the following mistakes:

Don't Be a Stranger

VCs may accept proposals that come out of the blue, but they almost never fund them, according to Paul Graham, who quotes one VC saying, " I know a lot of people. If you can't find some way to reach me, how are you going to create a successful company?" To have a fighting chance, you need to find someone that you and the VCs both know to make an introduction.

Don't Be Weird

Founders may feel tempted to separate themselves from the crowd by using outrageous, attention-getting gimmicks. Resist that temptation. Don't be like the woman who walked into a venture capitalist's office dressed as an avocado, prompting the VC to say she lost him "at hello."

Don't Try to Move too Fast

When you find the right investors, you are going to enter into a long-term relationship. Don't rush things and scare them off by pressuring them to seal the deal during the first meeting.

Don't Be Phony

In their eagerness to impress, they may try to cover up gaps in their knowledge. This can easily backfire and come across as a signal that the founders are untrustworthy. If the VCs ask you a question, and you don't know the answer, just be honest.

In short, never overlook the importance of forging personal relationships, and don't expect this aspect of the funding process to take care of itself. Prepare yourself to come in right off the bat being your best honest, connected, patient and trust-inspiring self.

set yourself up for venture capital success