I recently had a meeting with a venture capitalist who mentioned that he would be presenting my startup at their Monday meeting. To my surprise, he also reached out to me personally, adding me on social media. From your experience, do these actions indicate a good sign? I’m feeling pretty anxious and would love to hear if anyone has had a similar experience or insights on what this could mean. Thanks in advance for sharing your thoughts!
Also if you're actively fundraising, run a process - you should be going down a list of like 100-200 VCs, any one intro meeting like this should mean nothing to you. Don't get emotionally attached this early in the pipeline
- Getting to know you and your business - Deciding whether you’re worth investing more time into - Discussing with colleagues if you’d be a fit for their portfolio - Discussing valuation and terms - Them pitching your business to their investment committee - Agreeing and signing a term sheet - Legal, technical and financial DD - Final contracts and negotiation
People often fail to realise how many steps there are in a VC investment. Typically angel investors are usually faster and less formal.
This sounds good - social media feels unusual (I spent 2 years at a VC fund).
VCs, due to the nature of their business, are incentivised to keep potential investments ‘on the line’. That means it’s very rare to get a full-on rejection from a VC right at the very beginning.
Most deals never go past that initial “coffee and hello” stage.
My advice would be if you have one VC’s ears perked up… Use that as evidence you’re onto something and talk to more.
It’s very much a FOMO game - investors will always be more interested if you’re talking to other firms.
Best of luck.
The way OP described it felt like they were watching each other’s stories on Insta
This Monday meeting may be the go/no-go gate for the next phase, where they decide whether to invest more time to investigate your business. They will evaluate in each stage, every time deciding whether to invest further effort.
If this is your first such encounter, and it sounds like it is, my suggestion would be to approach it with a primary objective to learn about how this whole process works.
Often founders approach these situations like it’s a one-way thing (VC must decide they “like” the startup), but in reality, it should be a two-way process: the founders should also evaluate the VCs.
I would ask the VCs about their portfolio companies, and some of their success stories. Ask them if they could introduce you to some of the founders they backed. Reach out to some of the others yourself. If everything works out, you’ll end up married to these guys, and you want to know who are you getting in bed with.
In the extreme, these guys may be running one of those predatory schemes where you basically get sold some bullshit accelerator program and they screw you for equity.
A good rule of thumb is: the moment they ask you to pay anything - GTFO.
And here I mean literally ANYTHING: you should not be expected to pay a single cent for anything relating to their process; it’s their business to do that and bear the costs. And this also extends to the cost of due diligence (if and when it comes to that): the VC should bear all the costs no matter how it ends, whether they invest or they bail.
Extension of this rule: the moment they offer anything except cash for equity - GTFO.
Good luck!
It incentivises rationality in how legal counsel is used in the process.
Don't get too nervous though. Every VC I've ever met is rooting for the entrepreneurs. They want you to succeed. Everyone starts off bad at pitching. The experienced ones could often figure out what you're trying to do even if you say it wrong, and why it would/won't work. The first one I met actually taught me some valuable tips on how to pitch and I still use that framework. As long as you're not pitching to the bad VCs, it should be valuable experience.
Also they often add you on social media because they want data points. It's unlikely you'll get a deal right away, but it's not a rejection. They want to see where you are months later.
These are long term relationships where the value of the relationship builds over many years. By which I mean these are ordinary B2B relationships. Which means that if you know of someone else who your new contact might want to meet, introduce them because that will add value to your relationship because it helps the other party stay in business.
And the exhaust fumes of value are that you can be a person who they might want to work with. Because working with people you want to work with is how business relationships work.
Maybe something happens between now and ten years from now. Maybe it doesn't. Your only choice is to be helpful or not. Good luck.
Sure, when you talk is better then not talk, and I must admit, this is basics of business learn (when people don't talk with you, this is very bad), but real business will be when you will sign agreement and got money, and every additional round is approximately equal on weight to number in exponent.
Consider this as good opportunity, to make great things, and move on.
you cross bridges when you get there.
Chill!