Ample venture funding is available to companies in Silicon Valley and beyond. How to meet the right people and say the right things? How to charm investors? ‘Charm’; Really??
By account of venture experts and successful serial entrepreneurs charm means a lot; it means whether you get funded or not! Of course, the value proposition, the business idea, the business model and the core values of the startup leaders are the focal point. However, charming investors can add the spice and final tipping in fine tuning their decision to either 'let's go!’ or 'not interested'.
Alex Vieux, named by business leaders as “The ultimate entrepreneur”, is the chairman and publisher of Red Herring and CEO of Herring International. Red Herring runs several conferences, including Asia, Europe, Americas, and Global, which are focused on innovative startups in finance, mobile, Cleantech, Internet technologies, social, and software solutions for various business domains. Through Red Herring Top 100 and other events, Vieux analyzes the potential of approximately 2,000 startups each year.
At the Red Herring North America this past week, Vieux invited 200 pre-selected, mainly late-stage startups and companies, to vie for the coveted Red Herring Top 100 List. Most of the presenting businesses have already climbed up the success ladder, with more than one funding series, showing significant sales, some of multi-million deals, and an impressive list of customer acquisitions.
The Red Herring top 100 lists are highly recognized. The lists and awards highlight the most promising startups from Asia, Europe and the Americas. Entrepreneurs are encouraged to apply for a thorough review in a rigorous 3-step process that looks at all aspects of the company, and compete on awards. Since 1996, technology industry executives, investors, and strategists have valued the 100 lists as a credible tool for discovering and advocating the most promising private ventures from around the world.
Vieux, whos contributions to the IT industry span more than 20 years and include co-founding two banking software companies, has been involved in entrepreneurial activities and incubation for many years. He currently serves on the boards of several international public and private companies, and also active in public service. Vieux has been highly recognized in academia, as a visiting professor and instructor, at several universities in Paris, France. “Red Herring provides numerous opportunities for the participants to meet, share, learn, collaborate, and forge partnerships,” he said. The atmosphere at Red Herring is very professional, elegant, yet relaxed. Throughout the two and half days of conference, you could see many hand-shakes and small groups side conversations, investigation potential business and collaboration opportunities.
Entrepreneurs: Don' t go to every investor
In several panels, venture capitalists (VCs) shared learned lessons and recommended constructive feedback to the entrepreneurs in finding the best funding options and the best match. Vieux summarized the message: Don't go to the highest priority investors on your list; keep the top ones for later, after you have refined your pitch and learned lessons. In the last step, approach the top 3 investors on your list. At that time be sure on how you stage your game and what you wish to present in the best possible way. He also said “Do not approach the quest for funding as a chase game, but keep it targeted. The shot-gun approach doesn't work - it is not a video game!” Vieux emphasized that the focus is on the founder or CEO - the person, as well as the team members. Therefore, he advised to simply ”Be yourself".
Another recommendation: read between the lines; it's not only what is being explicitly expressed as feedback. Often, nuances and tone are crucial for the entrepreneur to understand: While being tuned to VCs questions while you pitch, try to gauge the potential implications in what is spoken and also the unspoken: are they really interested? Is your pitch too long or too detailed? Are the investors engaged or do they seem distracted (or even bored)? Are they asking about your availability for a follow up? Are they asking about your next steps? If this is a deal the venture firm is interested in pursuing, they wouldn't want you to go to another funder. Etc.
Last, pitching is not the end-of-the-road: Later on, keep the investors in the loop, by providing occasional short updates. For example, let them know when you acquired a new significant client, or added significant features to your offering.
1. Red Herring highlights technology news from around the world, for Cleantech - check Red Herring's publications at http://www.redherring.com/category/clean-tech/
2. For the top 100 recent exits click on http://www.redherring.com/events/top-100/red-herring-top-100-recent-exits/