Always Leave them Wanting Your Money

Your capital is a commodity, but you don't have to be.

It’s a running joke in the industry that VCs frequently don’t behave well with entrepreneurs during initial pitch meetings, and that situation is exceptionally acute for non-partner VCs. The reports are so consistent that it just must be true that up-and-coming VCs don’t always treat entrepreneurs with the respect that they deserve. Sure, as an associate, principal, or junior partner, a significant part of your role is to navigate near-endless pitch meetings, the vast majority of which will not result in an investment. However, it is critical to remember that each interaction can profoundly impact the perception of your firm and more importantly your personal brand within the startup community.

Why Every Conversation is a Selling Opportunity

Cynically put, the VC product is undifferentiated and expensive capital. So to find willing buyers, you have to spend time selling, at least with the best entrepreneurs.

By definition most of the meetings you take are with a startup which your firm is not going to invest in. And your firm is not going to want to invest in. But occasionally, and it’s your job to find those, you actually do want to invest in the company. So the first impression that you leave the entrepreneur about your firm really does matter in those instances.

Practice Makes Better. Regularly engaging in pitch meetings allows you to hone your selling skills. Use these opportunities to test how you present your firm and yourself. This practice prepares you for when a truly compelling opportunity comes your way, ensuring you can present in the best light possible in that crucial moment.

Building a Referral Network. Some of my best referrals to exceptional founders came from other founders who I knew a few minutes into the initial conversation that the investment wasn’t going to be a fit. But if you spend the next 20-40 minutes sharing glimmers of why it’d be great to work with you and your firm, that’ll leave an impression for when a founder’s friends ask about who they should pitch for their upcoming round. Entrepreneurs certainly talk to each other, and a positive experience can lead to more pitches from well-regarded founders in their network.

The Next Round… or the Next Company. Unless the founder is completely unbackable, there’s a possibility that the next round or even her next company will be much more attractive. Traction creates opportunity, after all. Being remembered favorably can make all the difference for her eventually looping back to you.

Discovering Unexpected Opportunities. You never really do know when you’re going to be surprisingly excited about a company. Some of my peer GPs boast about limiting their new pitches, tightening their selection criteria significantly to only extremely qualified leads. However, I believe that approach is misguided; some of my most promising discussions have stemmed from meetings I was initially hesitant to take. It's crucial to remain open, as it’s the founders themselves who drive exceptional outcomes that defy initial expectations. Ultimately, every conversation is a chance to discover these exceptional opportunities, making it essential to sell from the outset and stay open to surprises.

Ensuring Founders Want Your Money

My partner at NextView, Lee, consistently repeats the mantra that “we should leave every meeting with the entrepreneur wanting to take our money, whether we decide to invest or not.” A few tactical thoughts about what you can do to have founders leave your conversation with that feeling.

Prepare, Just a Bit. Spending just 5-10 minutes learning about a company and the founders' backgrounds before a call can set you apart from most other investors. This preparation allows you to bypass generic questions and dive deeper into the specifics that matter, both starting with a positive impression while also utilizing your own time more efficiently.

Listen Actively. Ask founders what they’re seeking in an investor and genuinely listen to their responses. This information allows you to tailor your firm’s positioning to align more closely with their needs and expectations.

Clarify Your Process. Even if you anticipate passing on an opportunity, explain your firm's evaluation process. This transparency helps build trust.

Pass with Grace. The amount of time going into a relationship should be commensurate with time & consideration spent passing. For brief interactions, such as a 30-minute Zoom call, a semi-personalized concise email is so much better than just ghosting. If a deeper, in-person engagement occurs, sharing your decision over a phone call is quite constructive. It’s never an easy discussion, but forges a lot of respect.

Your reputation as a VC is built cumulatively, shaped by how you manage each interaction with founders. Approach every pitch aiming to leave entrepreneurs eager to partner with you, not just secure your capital. This strategy enhances your personal brand and will pay dividends throughout your career.