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An entrepreneur seeking venture capital can feel like a knight on horseback, looking longingly across the moat at the gleaming spires of the VC's "castle" beyond. How do you bridge that gap and actually get inside the castle walls, where the money is? Here, my shortlist of tips to get a venture capitalist's attention:
1. Get an introduction by a partner-level lawyer. He or she should work at a firm that does a lot of VC financing work. Best-case e-mail/ voice mail: "This is the most interesting company I've seen in my 20 years of legal work for startups." Venture capitalists dream about calls like this.
Incidentally, this is part of the reason why you should pay top dollar and use a well-known corporate finance attorney instead of Uncle Joe the divorce lawyer (even if he handles venture capitalists' divorces). You're paying for connections, not just expertise.
2. If you're in tech, get an introduction by a professor of engineering. Best-case e-mail/ voice mail: "These students are the smartest ones I've had in 20 years of teaching computer science. Larry and Sergei would have carried their backpacks for them."
3. Get an introduction by the founder of a company in the venture capitalist's portfolio. Best-case e-mail/voice mail: "My buddies are starting a new company, and I think it's really cool." It helps if the person making the call is from a successful company in the venture capitalist's portfolio.
Tap your network on LinkedIn to find acquaintances in the VC's portfolio. Here's a power tip for using LinkedIn to meet VCs. Maybe it's just me, but I hate when a connection of a connection of a connection wants me to take a look at a deal. LinkedIn enables you to just make direct contact, and that's my advice--if you can show success (see tip no. 4). If you can't show success, the connection of a connection of a connection is useless anyway.
4. Show success. If you can't get any of these types of introductions, the most compelling e-mail/voice mail you can produce is: "My buddy and I have been working in our garage, taking no pay, and we built a site that is doubling in traffic every month. Right now, we're at 250,000 page views a day after 30 days." With these two sentences you've proved to investors that you can make a little bit of money (none) go far, your architecture looks scalable so far, and--most important--the dogs are already eating the food. (Sure, you can provide links to articles singing your praises, but this only means that you've fooled the press, not necessarily that the dogs like what you're serving.)
5. Make sure your company is in the right space. No matter how you get to the venture capitalist, make sure he or she is the right one for you. After all, there's no use pitching to someone who can't help you. If you have the cure for cancer, for example, contacting a firm's enterprise software guru isn't the brightest idea, so get on the web and do your homework.
6. Send a short e-mail. The ideal length is three or four paragraphs, and make sure it covers these points:
- What your company does
- What problem you are solving
- What's special about your technology/marketing/expertise/connections
- Who you are
These tools will help you get over the moat. Once the drawbridge is down, what happens next is up to you.