While the nature of the founder’s and VC’s jobs hasn’t changed over the past few months, the format of their interaction has changed a lot. Pre-COVID first meetings typically happened in person, including some small talk over coffee. Now, we meet as we’re sitting behind screens — if we were to pass one another on the street, we might not recognize each other. It is tricky to emulate in-person meetings and achieve a comparable level of familiarity without face-to-face interaction.
Beginning a conversation has become increasingly challenging, and that starts with getting each other’s attention. My inbox is filled with more emails than ever before, and I assume most founders are experiencing a similar issue. Moreover, as events have been cancelled and serendipitous meetings are unlikely, the default meeting medium has become email and video calls.
I admire how fast some founders reacted with creative strategies for communicating effectively with VCs, even when the world had gone virtual. I’ve found that the most successful founders understand what matters most to VCs in these early interactions. Here are some of the most useful strategies I’ve seen from founders seeking a conversation — I certainly intend to try some myself.
Standing out from the crowd
With geographic limitations disappearing, the range and target audience has increased for VCs and founders alike. In the last 6 months, almost every startup has suddenly gone into fundraising mode, which saturated the market and filled VCs’ deal funnels.
Amid an inundated mailbox, one founder’s outreach caught my eye. Instead of a regular introductory email, this founder sent an email: “I know you’re busy — so here’s a 30-second video I made (VIDEO_LINK)”. If I were to receive such a message again, I would watch the video again — guaranteed. What’s more, using video is a way founders can target their messaging for the recipient with voice over and some strategic reorganization of pre-made snippets. This approach to communication is unique, much more personal, and such a stark contrast to yet another mail merge.
I took the personalization inherent in this video message as inspiration. While I always personalize slides I prepare for founders (which automatically gives an “I made this for YOU” feel), I’m now considering testing out a personalized video.
It’s inevitable: as a founder pitching to a VC in the COVID era, you are going to have an introductory video meeting. Optimize the time you spend on the call itself by allowing VCs to digest key facts before (preferred) or after the call. When VCs can process the information on their own time, the conversation can be less structured and formal and instead will be more people-centred around the founder and team.
Clever ways to share helpful content and save time for you and your potential investor include sending:
- A non-confidential teaser deck (I understand founders might not want to share a full-blown investor deck with everyone)
- A recorded demo-day like live pitch
- A continuously-updated Google Doc with investor FAQs.
Side note: FAQ-sharing remains relevant as diligence progresses. Founders who keep a record of all questions they’ve received from VCs and write out structured answers continue to learn others’ perception of the startup. Ideally, they only have to answer the same question once.
Hearing from customers
As a B2B-focused investor, hearing the “voice of the customer” is essential for me to build conviction. Getting customer feedback, though, has become increasingly difficult. After all, your customers have their hands full — now more than ever — with important business, and you can’t introduce every VC to them.
However, understanding your customers is increasingly important, because a lot of concepts and metrics no longer apply post-COVID. Some industries have benefited while others were abruptly shaken, and buying decisions have changed accordingly. Many such consequences did not result from logical, market-based triggers. How to bridge the gap?
An effective way of communicating that I have observed is to send VCs a video that includes testimonials from a number of customers. It is essential to note that this exercise is not about video quality or expensive editing; rather, the goal is a scalable, authentic, positive customer signal.
Across the VC industry, we are in a unique situation and grappling with new difficulties. We can reduce a lot of friction by helping each other as best as we can. Important to note is that effective interactions require mutual alignment of founders and VCs and both parties doing their part. For my part, VCs talk about value-add a lot, and one of my main resolutions is to add value myself. I want founders to consider every single conversation we have to be worth their time.