The Internet and Social Media are moving entrepreneurs closer and closer to sources of start-up capital. Whereas in days past your funding relied on knowing someone, or knowing someone that knew someone–today it is about getting to know someone.
Angel Investors, Venture Capitalist, and Private Equity principles are increasingly Web social. They have blogs, Twitter, and follow lots of folks on Friend Feed. Networking was always a core principle in their success, but now they can scale. This means not only can they meet and follow more people and opportunities, but you can also listen to what they find compelling.
Following and watching investors can quickly focus you in on who and how to target your pitch. Or, even give you ideas for creating a new start-up.
Join the Conversation
Now that you have a good idea of who you should be talking to and what they are interested in it is time to join the conversation.
Blasting a strange VC a presentation is probably not going to be terribly productive. However, engaging intelligently in their discussion will. Here are some easy ways to join the conversation:
Comment on their blog
Answer their Twitter questions
Discuss topics on their Friend Feed
Comment on blogs they read
Twitter people they follow
Add Value to the Discussion
Venture capitalist are an inherently curious sort. If you can help feed or answer their curiosity you will draw their interest. Inherently your expertise will surpass that of most venture capitalist–that is why they would invest in you–so help them out.
These are a few sure fire attention grabbers:
Talk about the market you are in
Talk about what causes your market to move up or down
Talk about their portfolio companies
Talk about what one of their companies should do next
Remember, don’t just target the investor or VC directly engage with their colleagues, portfolio companies, competitive companies, and their entrepreneurs.
Tell Your Story
Now that you are in the conversation and attracting (even passive) attention from investors. Tell your story. Talk about your projects, your ideas, and your starting up. Keeping a bright idea under a bushel basket attracts about $0.
Don’t forget the little details. VCs like to hear what you spend money (talk about office leases, chair purchases, Mac or PC), how you design teams (talk about titles, office design, individuals), and how you fail (talk about downtime, blown sales, flubbed marketing ideas).
Manage Your Young Brand
Do you remember me saying that venture capitalist were inquisitive? That means you need to have a place for them to lurk around and learn more about you. Make sure you have a website or blog that talks about your start-up. It should look professional and be clear about your unique value proposition.
This should be the link in all your social profiles and blog comments.
Like curiosity, investors are notorious for short attention spans too. If they tap you on the shoulder you probably only have one brief shot at tipping them. Have the following ready at all times:
5 minute elevator/telephone pitch
1 page executive summary
1 page financial summary (projection & ask)
10 slide PowerPoint deck
1 URL with social media pitch