Unlike some other startup meetings this was a tight two hours, around a conference centre in a law firm, with a slightly older, less hipster-ish, but still relaxed (the organising partner was also dressed down) attendance.
Here are my take-aways:
- a lot of VCs don't advertise, you have to seek them out and if you do, get an introduction rather than cold call.
- VCs tend to look for seven to 10 years of involvement in the business, well at least German ones do
- read Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist by Brad Feld - I've already downloaded it to my Kindle.
- also check out Brad Feld's blog
- if you have to incorporate in the US, it will probably be best in Delaware or California
- have a real business which has a solid, scalable model
- be respectful to everyone, some VCs are quite small and you may be lucky just to talk to a junior
- show traction and how you would use the money
- disclose anything (e.g. dormant co-founders) before you are found out
- take projections seriously - don't be glib
- don't forget to include legal costs
- have scenarios on what would you do if you raised more/less/none/exactly what you wanted
- some VCs will do convertible loans before series A round
- VCs might take 5 to 25% of equity depending on investment
- ultimately the deciding factor for VCs to invest is the team (including are they fun to work with - answer: yes we are)
- beware of liquidation preferences - better for a co-founds to have less equity
- documents can be in English (yay!)
- business plans are less required by VCs (than by, for example, banks).
- a pitch desk can be 10 - 15 slides (with even ca 60 backup slides) and take 45 minutes of a 1.5 hour meeting with VCs - though the initial meeting may just 15 minutes.
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