Many previous articles have talked about how to connect with investors, including how VCs can suck but you can minimize the pain, doing your own diligence on them, and working with smaller versus larger investors. What this post is focused on is on reconnecting with a VC that you already know. If you have a very strong relationship, such as they funded your previous company, then you should know well how to get their attention. But otherwise, if you are having a hard time re-engaging, chances are the tips below will help.
1) When To Reach Out?
Before a major holiday is usually a bad time because someone or other in a partnership might be off duty. In the case of the US that tends to be Thanksgiving to New Year’s, in Europe it’s also especially in August, in East Asia often during the Lunar Year celebrations. But there is wisdom in trying to set up initial meetings during this time period, there will be less competition for the VC’s time. More important than the time of the year is arguably the stage of the fund cycle. Many funds will make most new investments in first 3 years, leave 50% for follow-on capital, and a partner will be handling 10 deals. If you notice some or all of these conditions are true, then very likely the firm wouldn’t consider a new investment until raising its new fund.
2) Are They Lead Or Follow?
If you don’t know the answer to that, then it should be part of the homework even before pinging the VC again. Your approach will very likely differ significantly. For a lead you want meetings now. For a follow there is often no harm in engaging but ideally you want to save them (and yourself) the time so keep them warm for later, until you are close to or actually have a term sheet.
3) Multiple Touchpoints Or Direct Outreach?
There is obviously a huge variance among individual VCs but in general, the larger a firm the better it is to get endorsements. Deals in VC firms are for the vast majority championed by one partner, with a consensus from the other investors. So it naturally follows that in a larger partnership the more positive touchpoints you have the better. In a smaller partnership, the benefits of direct outreach will probably weigh higher.
4) High Level Or Details In Your Message?
A good VC sees a thousand deals in a year so unless you are a very proven quantity to him/her, you want to rise above the noise. Which means it’s almost always a good idea to give some detail in your initial message. The classic strategy is to have an intro deck and offer to share the full deck after a meeting. Alternatively, if you and the VC are picking up a long-standing conversation you could highlight meaningful progress in the business. This includes crossing a major revenue threshold, signing a key customer, or announcing a significant partnership.
5) Still Not Hearing Back?
Could be that your message got buried but if that’s not the case, give yourself a few days say a week and reach back with updates on the fundraise. The key phrase that will get any VC’s attention is if you have a term sheet from another fund. At that point timing and ownership become even more pronounced. And make sure to consider the dynamics among the funds since they will vary from being very competitive to very collaborative. As a general rule large funds will almost always be mutually exclusive to each other because they often look for certain ownership, say 20%. Small funds will be more likely to syndicate since they will typically come in early and look to share the risk, or come in a later round as a follow.
Originally published on “Data Driven Investor,” am happy to syndicate on other platforms. I am the Managing Partner and Cofounder of Tau Ventures with 20 years in Silicon Valley across corporates, own startup, and VC funds. These are purposely short articles focused on practical insights (I call it gl;dr — good length; did read). Many of my writings are at https://www.linkedin.com/in/amgarg/detail/recent-activity/posts and I would be stoked if they get people interested enough in a topic to explore in further depth. If this article had useful insights for you comment away and/or give a like on the article and on the Tau Ventures’ LinkedIn page, with due thanks for supporting our work. All opinions expressed here are my own.
