Silicon Valley and the world of startups in general is supposed to be a safe space for unconventional thinking and weird ideas. But spend much time reading about startups and talking to those involved in them and you quickly realize that, like every other segment of the population, VCs, entrepreneurs, and techies have their orthodoxies.
The Israeli VC industry have gone through a major shift over the last few years, as it became younger and much more global. The profile of the new Israeli VC is young, ambitious but humble, well-educated, with global experience and much love for what Israeli tech represents to the outside world.
On this week’s episode of “Entrepreneur Elevator Pitch,” one contestant learns what’s going on behind the scenes is more important than the product she’s pitching.
Finding investment partners comes down to prioritizing and communicating properly.
A number of years ago, while I was in engaged in raising capital for my company, I was on a golf course (where you often find yourself in these situations) with a few potential partners.
Up to this point, I had developed an exhaustive business plan, rehearsed and mastered the pitch and the ask, and felt like I could talk about any aspect of the business and the industry.
Many investors have written about how they need some companies to win big in order to cover for other companies failing completely. As a simple example, Fred Wilson at Union Square Ventures tells his investors to expect a third of his investments to fail, a third to return their capital (which is also failure—they sell for a small enough amount that investors just get their money back, and in most cases the founders and employees get nothing), and a third to “succeed,” where his definition of success is that they return five to 10 times the original investment.
Warm up your approach through creativity and connections.
“I hope you’re winding down your weekend nicely. First off, I apologize for the “cold” outreach…”
This is an excerpt of a recent email I received–and a good example of one that will get deleted in record time. As a venture investor in early stage startup companies, I receive a steady stream of email pitches like this every day.
Unfortunately, all of them get the deleted without a reply. There might be a nugget among the daily onslaught, but I have never seen a company come over the transom (“cold”) that resulted in a great exit.
The only investment opportunities I’ll consider reviewing come through referrals from founders, VCs, or trusted industry veterans. “Ok, great Chris,” you’re thinking. “I live in Boca Raton, Florida, and I don’t know anyone in the venture business, or anyone in Silicon Valley. What am I supposed to do? How can I connect with you and avoid the delete key?”
I’m glad you asked. Here are suggested steps to help you rise above the noise, and make the right connections to get a proper referral:
Contrary to popular belief, the highest degree of control in a company is not determined by the shares percentage that your investor might have, but by the conditions you agree on when signing the investment term sheet.
Top ten differences between Los Angeles and Silicon Valley cultures. The merging of entertainment and tech was the foundation of my own startup, EVER, I launched two years ago to satisfy the human curiosity that occurs when you see and like something new on TV. Pitching EVER took me from Silicon Valley to LA almost every week for over eighteen months.
There may not be many textbooks on how to be a good VC, but professors, academics, students, entrepreneurs, startup execs, journalists, pundits, lawyers, accountants, other VCs, all are often eager to lend their expertise to VCs to help them learn about new technologies, new business models, new learnings in management sciences, complex corporate or IP legal matters, etc.
“Which is why I am quite surprised why I still feel so many VCs keep ‘faking’ it.”
Learn how to negotiate with the most common types of investors.
Every entrepreneur seeking funding loves the challenge of getting customers and investors excited, but dreads the thought of negotiating the terms of a deal with potential investors. They are naturally reluctant to step out of the friendly and familiar business territory into the unfamiliar battlefield of venture capitalists from which few escape unscathed.