Fundraising, Resources

The VC Meeting Map: What to Expect After a Successful First Pitch

Nearly all of the guidance for meetings with VCs is centered on the very first meeting: how to get it, how to prepare a pitch deckhow to run the meeting, etc. But then the tactical advice stops. What about the rest of the VC fundraising process? How should an entrepreneur approach the full set of meetings and emails during a fundraise?

The purpose of all VC meetings is to get another meeting. It’s not to push a decision. As a result, understanding the general flow of the meeting process is absolutely critical for founders.

VCs don’t like wasting their or their partners’ time. So they’re not going to be conducting multiple meetings if there isn’t a serious prospect of a startup becoming an investment. Unlike “traditional sales” where there’s an eye towards closing immediately because a large part of the process is convincing the other party it’s time to buy, VCs (if they have capital to invest) are always ready to “buy.” They just have a set process for doing so which doesn’t really deviate that much.

Below is a general overview of what a typical process might look like, as well as a graphical representation you can use as a cheat sheet for what to expect:

First In-Person VC Meeting. With usually just one VC partner in the room, the intent of this meeting is to explore if the opportunity is interesting enough for the firm to take seriously as an investment opportunity. (Sometimes this meeting is preceded with an even lighter-weight phone call screening or a meeting with a junior investment team member.) Whether it was the referral or a pre-marketing deck which caught the attention of a partner to make the meeting happen, all VC conversations begin at the same starting line. And regardless of how an entrepreneur leads this discussion, the purpose is not to ask for a commitment immediately. Instead, the key to a successful first meeting is to get a…

Second Meeting. This second visit to a venture firm’s office usually this involves an additional second partner who acts as a second set of eyes for the partnership. From a VC’s perspective, this meeting’s goal is to both (A) confirm the original intuition and ensure it’s not off base and (B) ask follow-up questions about specific topics or issues which surfaced in the time period between the first meeting and now. For the entrepreneur, she should just plan to use the same conversation/pitch format as the first meeting. It will likely be 90% of the same content in this second meeting. If all goes well, the original partner will begin a series of…

Diligence Meetings. Once two partners have decided the investment is worth pursuing, the process becomes a bit more ambiguous and less standardized.  What follows next is “diligence” – a series of homework assignments, meetings, and phone calls led by the original VC partner to validate the opportunity and explore any concerns within his or her partnership. Sometimes it’s tough for founders to know if the process is progressing or not. The most visible signal is that it should feel as though things are accelerating, rather than feeling a steady stream of interactions (or worse, a deceleration). Either the VC is getting increasingly excited or not, and that’s what you want to look for as a founder. If the diligence period ends up positive for the company/team/entrepreneur, a common next step is a…

Broader Audience Meeting. (This is often optional.) Depending on how large a VC firm is, occasionally it’s necessary to loop in a larger set of the investment staff to the startup’s story even prior to the final partner meeting (more on that below). The purpose of this broader audience meeting is for the original lead partner to socialize the investment now that it’s building steam in order to uncover any lingering questions from others so they don’t surface unexpectedly later on. And even though it’s a complete repeat for a founder, the same initial presentation, taken from the top, should be used again. As you work towards a final decision, next you can expect the…

Partner Meeting. This is where “the decision” is made. You could argue that every previous meeting is equally as important as this one, as they’re interconnected, but the partner meeting is the most important single interaction. Especially in larger partnerships where some people are hearing your story first-hand for the first time, the outcome can be more volatile. Typically by this point, the lead partner has transformed into an advocate for the investment and might prepare a founder with tips and guidance on navigating this meeting effectively. Only now should an entrepreneur convey the direct “ask” and push for an immediate, definitive decision. If there is mutual interest and, after any necessary back and forth around the specific ask concludes, a positive outcome for both sides is to hold a…

Denouement Meeting. Once any firm has made a decision internally to invest, they don’t want to lose out on the opportunity. Quickly the tables turn and often a VC requests a follow-up in-person meeting to present a term sheet, talk through terms, sell their firm, and also sometimes conduct “confirmatory diligence” (dot the I’s and cross the T’s on diligence questions, though this won’t affect the outcome).

Especially during the early days of a startup, we believe the fundraising process is about finding true believers, not convincing the skeptics. So by the end of it, there should be a shared perspective between founders and investors about the vision for the company and how the relationship will work. Although the visible consummation of the process is a term sheet, the real outcome – alignment with a supportive partner – is even more important.

Meeting Process Visualized:

(Click to view a larger version.)

VC Meeting Map - NextView Ventures

David Beisel

David Beisel is a co-founder and Partner at NextView Ventures. He has been focused on early stage Internet startups his entire career, both as an entrepreneur and venture capitalist. As an investor in the digital media space, David was most recently a Vice President at Venrock and previously a Principal at Masthead Venture Partners. Prior to becoming a venture capitalist, David co-founded Sombasa Media, an e-mail marketing company best known for its flagship product BargainDog. Sombasa was successfully acquired by About.com where David served as Vice President of Marketing. David holds an MBA from the Stanford Graduate School of Business and an AB in Economics, magna cum laude and Phi Beta Kappa, from Duke University. He also founded and leads the Boston Innovators Group, an organization which holds quarterly entrepreneur events drawing a thousand attendees.

  • This was a great overview on the entire fundraising process, especially for a first time entrepreneur who has yet to finish the entire fundraising process. I really liked combining this post with an earlier post about Two Unique Pitch Decks (http://nextviewventures.com/blog/free-startup-pitch-decks-template/). I believe the Investment Team meeting would be an appropriate time for the second, presentation-style deck.

    Great advice!