Aug. 1, 2020

Your first call with investors - how to not butcher it and how to get one? By Sarah Leners.

Your first call with investors - how to not butcher it and how to get one? By Sarah Leners.

In this episode Sarah Leners, Venture Capital Senior Associate at Bull City Venture Partners explains how to lead your first call with an investor and more importantly - how to get that first call with an investor. We also talked about the current situation in the world of startup fundraising.

Bull City Venture Partners: https://www.bcvp.com/

Sarah's email: sarah@bcvp.com

For those who want to see ideas turning into fundable companies - Student Startup Battle: https://www.eventbrite.com/e/student-startup-battle-tickets-105973058270?aff=ebdssbonlinesearch


Transcript

This is fund raising radio and today's guest speaker will have Sarah venture capital, senior associate at bull C Venture Partners. And these Co will mainly talk about your first interaction with investors specifically during the current. 

The buyers is gonna be the colds. So, we're gonna talk about how to not butcher your first call with an investor. So, Sarah, let's be caused by you, giving us some background on yourself and on both CD Venture Partners. Sure. Well, thank you for having me. 

I'm really excited to be on your show. I grew up in rural Iowa, studied economics at Dartmouth where I was also on the track team. 

I got my MBA at the University, Chicago boot, and went into investment banking. So I was doing debt and equity financing and mergers and acquisitions. 

One of the deals that I worked on was a founder led to sale of a company. So, it was the first time that I had been involved in a sale where the founder was still pretty involved with their company. 

And because of that, I started looking at venture capital investing and that led me to where I'm at today. Nice. So, let's talk more about busi Venture Partners. What is that? 

Sure so bull city Venture Partners is an early stage founder, focused investor. 

And what I really like about her firm is the team is led by Jason Kathleen and David Jones, and I love how the team works. Really hard for our founders. 

So, what that means that we will bring new customers will bring in Co, investors when there's a leader around will help recruit talent to the company. And I really like the hustle. 

Right, yeah, that's the major fun part of the startup world, but actually, here, I want to get back to what you said earlier, which is, you were part of founder led company sale what does that mean? What does it mean? That's part of founder lead. 

Yeah. 

So, 

that means that the company was still being run by the founder, 

or the founder was very involved in the company versus, 

you know, 

doing that a sale of a company that had maybe been led by a CEO that was brought on or the founder of, 

or had already sold the company, so yeah,
so,
in that case, 

the founder was still pretty involved and this was a really big transaction for the founder. 

Nice. Nice. That's really interesting. And I believe that I already have scheduled an interview with someone who's going to go in depth into private equity fields, specifically acquisitions. So we'll not 
folks in this episode on this no people. 
If you're listening to this, people are saying, somewhere in the week, I have no idea when. Exactly. But somewhere in the week, that episode is coming. How? So let's move on. I want to talk just a little bit more about we'll see Venture Partners. 

What doesn't generally investing and what stage doesn't invest. Yep. So we invest in US companies with a focus on the mid, Atlantic and Southeast. 

We invest in software, Internet, mobile and technology companies. 

And then we'll make seed and Series A investment so our check size on average, we'll range from five hundred thousand to three million. 

I'm just quickly Googling, whereas mid Atlantic, because I have no idea. Honestly, I'm curious. It really doesn't matter. It's as long as it's in the as it doesn't really matter where exactly is that, but I'm more curious during the current of ours. 

Are you still focusing on those same regions or did you go nationwide? Yeah, we are going nationwide and we did just make an investment in the West Coast company. 

The reason why the reason why we focus on the mid Atlantic and Southeast, which is think D. C. 

Philly down to Atlanta, it's just because that's our backyard and we tend to see a lot more deals in our neighborhood. So that's why that's kind of a sweet thought for us, but we can invest anywhere in the US. Nice. Nice. 

That's that's reasonable. I'll make sure that you get more deals from West Coast, but let's move onto speaking about your specific role as a BC, senior associate at Venture Partners. What do you do there? 

Yeah, so, because we are smaller team. I get to work on a lot of stuff. 

So, on the investing side, I will help screen pitches pitches will come into me through my LinkedIn or directly into my email, or it could be referred to me from. 

An incubator accelerator and then all the pitch calls early on when I started we were putting together the, the legal Docs for our fund for, which were fundraising. 

And so I was, I was reviewing legal docs early on. And then I'm also involved in marketing and networking as much as I can, although as, you know, it's a little bit harder with everything being online. 

I'll do industry research work on our pitch deck, help with fundraising and right now working on quarterly reporting for our investors. Nice nice. So, it sounds like tons of stuff is on your plate. 

So thanks for taking your time by the way to do this podcast and I want to talk about. It's not working because slightly, I mean, we're slowly going into our major topic for discussion, which is first interaction with investors. 

How would you recommend founders to network? Because, for me, personally, you know, I've met my first best friends at some completely random events. 

What's your advice to people right now who can just go out to a bar that that's, you know, happy hour for some company or something like that? And what's your advice for them? 

Yeah, I think beyond doing a basic web search, I would recommend looking at companies that are in a similar space to yours. 
And see who they're early investors are, because they will be familiar with your space and as an added bonus, they might be able to connect to you with new customers or mentors. 

So, that might be one option when you do speak to a VC. And, you know, maybe you're not fit for them because you're not the right sector or you're too earlier too late. 

Ask them what other they would recommend you reach out to. Because I found that the VC community is pretty small, and they communicate a lot. 

We've gotten pitches from other BC firms that did it fit their thesis, but if it's ours, and then I've also sent some pitches that I've taken to other BC firms that might be a better pitch, or sorry. 

Might be a better VC for that. Founder. I would recommend reaching out to. 

A local ecosystem or investor community, that might be a way to network as well. So when you're saying that you should that's by the way great advice in terms of looking at your compares seeing who invested in them. 

And when you say that you should reach out to those investors, do you mean just like, on LinkedIn slash slash email or is there a better way to do that? Yep, either. 

I would say if you have a common connection on LinkedIn, you might be able to use that, or I get emails, emails and LinkedIn messages from people. I've never met before that's not out of the ordinary. 

And I think it's much more common in today's more virtual world, where you can't can't really meet face to face at these networking events. Right, right. That's true. That's completely true. 

So, let's move on to actually know senior, first investors, very beginning of the process. How do you find those first investors that are right for you? So one option is definitely looking at your compares. 

There's something else that you can use to find those investors who might be helpful for you. 

I think that would be the most targeted approach also. Maybe if there's somebody local to your area or yeah, it's a tough one. 

I think there are databases out there, but that might be less strategic, but it might it might put names on your radar. Right right. 

There is actual one database that I know is kinda okay I cannot guarantee that. It's really working. We test it out myself but it's called Foundry sued. I actually had an interview with the founder of that platform. So you can check it out. No search. Oh, yeah. 

But, yeah, probably looking at or comparison going through their investor release is the best option. So follow that and here we're moving onto making doing the homework on the investors. 

So before reaching out, you have to search what does the investor like to invest in? Maybe, they've participate on the podcast, maybe they wrote some articles because, you know, if you refer, like, hey, I saw your article and I really wanted to get in touch with you. 

It's much more likely that they will respond rather than if you say, hey, there's an investment opportunity. What's your recommendation in? Terms of? How long should the founders spend on? Actual researching the investor. 
I don't think that you need to do a ton of research. I think if you look at. 
Looked at the website looked at LinkedIn. You might be able to find some ice breakers in there. Maybe a common connection, or I'll have. I've had a couple of people say, oh, I saw you ran track. 

You know, I used to do that in high school or and this was the event I did, so it just kind of helps break the ice. 

But how would I would encourage founders when they're meeting PCs to have the VC pitch to them as well it's really common for a founder to ask us to tell us about, to tell them about us. 

Right? That is going, but don't be too. Pushy. Don't like, say, sell yourself to us. That's just rude. We will get to that a little bit later on so for now. Actually no nevermind, let's just jump straight into this. 

How to not bug for your first call. So, let's say you've reached out to them on the email. You've got that first interaction going, he sent them your pitch deck. They're kinda interested and want to jump onto the first call. 

What's what are the major mistakes that you see, founders making during those first calls? I would just say it beyond time, be prepared with your pitch deck and a demo. 

If that's applicable to your business. Know that we're human too. And it's okay, if you don't have the answer to something, you know, and that's a really great reason to follow up with us in an email. 

I haven't, I haven't seen anything, you know, terrible will happen. Nothing terrible. So if I'm gonna ask you a question, what was your first? What's the worst piece you've ever seen in your life? 

Will you be able to answer that question without naming any names? Specifically? 

I would say there was one pitch that stood out to me, because it felt like the team wasn't prepared and I think maybe if they had it done a couple more practice rounds, that would have been better. 

But, you know, that's not a deal breaker. 

I will say I had a bunch of horrible pitches that I've seen, maybe just fourteen at a lower level. So we're working, mostly with Pre, Pre, seed Pre, seed stage company. So they're much less experienced. 

So I could show's point of view after the call. But for now, let's let's talk about, maybe the best speech you've ever seen, maybe something that really stood out to, you know, like a year later you're like oh, yeah, I remember that Foundry. That was awesome and just blew me off. 

Do you remember something like that? Yeah, I would say the best, you know, you've got a full team presenting to you, they can very clearly articulate with their product is and they can give you a demonstration. 

So, and it's just very clear and they understand their market.
They understand, you know, just a lot about where they're going and that really impressive us. 

Right being able to show something that's really cool. And being able to show it in organic way is even cooler. So, you know, by the end of the call, you have showed them the demo, you know, you explained the problems we're solving. 

They're kinda happy, but you still have to close it with some call to action. Sometimes it's the investors who says, like, you know, what we're gonna pull up. 

We're gonna, I'm gonna send to my team for some basic due diligence and I will follow up with you in a week, but sometimes investors don't really say anything. What should be the call to action from the founders standpoint here. 
Yeah, 
I think an easy follow up with just be to send a thank you email get back to us with any unanswered questions, 

any follow ups that came up as a result of the call and remind us of any follow ups that we might oh, you,
you know,
if you're not getting a response, 

it might just be because the vc's really busy. 

And, you know, if it doesn't seem like a right fit either right time, you can few months down the road email them again and just say, hey, you know, Here's some milestones that we've just hit. And that will get you back in front of them. 

Right that's great advice. And that's my personal recommendation. You have at least two people on the call with an investor. 

One of them should be, 

you know, 

actively talking to the investor while the other one is making the notes, 

you know, 

writing down what the investor is asking you so that you can later on improve your answers to those questions because generally investors ask similar questions. 

Yeah, that's kinda nice. I always give good advice. I know that but let's let's talk about more of a current situation, so right now it's curtain wires. 

Everyone's in line, everyone's doing those calls so you have some major takeaway that you see going on. So, is there some major advice that you could give to founders trying to raise money right now? 

Yep, I would say the good news is that there's still many out there and people are still investing. 

I would also say, continue just doing a great job of growing your business reach out to that seem like a good fit for your company and set up a pitch over a video call. 

There's also a bunch of virtual pitch days and demo days and if you can try to get into one of those, I my sense is that a lot of PCs are tuning in. So you'll have a really good audience. And one thing that has impressed. 

Me is when founders reach out to me before the pitch day. I think somehow they get a list of the investors that are gonna be joining and yeah, they'll they'll just send me a quick note and just tell me, you know, a little headline about their company. 

Tell me what time they're presenting, and, you know, that really impressed me. 

That really does help that's a really nice strategy that takes away extra five, maybe ten minutes, but it does work. 
You know, investors already know you, they already kind of like, if there's someone interested, they will be really looking forward to that specific page. So, nice treasured there. Definitely follow that advice. And here, we're moving on. 

I forgot just one question that I ask, basically, every investor in my podcast. What are the major? 

The three must have points on the beach deck that you just have to see I think if the pitch deck clearly articulate what the product is that's really 

helpful. 

It. It's helpful to know the backgrounds of the founding team and how it's relevant to what they're doing today. 

And then I always like to hear how it. 

You know what they've created a, solving a problem that they faced, or how it's, it's personal to them that that helps me make a connection to. 

Right you have to tell a story, 

because especially in the early stages, 

the stories, 

the most appealing, 

you know, 

if there's some epic background on yours, 

that just makes it perfect founder product fits, 

then the chances are much higher that they're gonna buy that. 

But you're, we're moving down to your call to action so now it's your time to give our listeners a call to action. What's the one specific thing that you would like them to do? As soon as the episode is over? 

Yeah, if your company fits into our investment thesis, we'd love to connect you can email me directly at Sarah. S. A. R. H. at com. 

It's also on her website dot com. Nice. And for those of us who have a really bad memory like, myself, can you please remind what are your investment criteria? Yes. 

So we are seed and Series A investors us based companies and software, Internet, mobile and technology. And you can see some of the companies that we've already invested in. 

On our website sounds good and my call to action is go to the description of this episode. 

I'll leave first of all leave the link to both Venture Partners so that you can review that I'll leave a link to SARS email. So that you can just copy paste it and email her easily. 

And also I'll leave a few links to a couple of events that fundraising the radio and make you see, you are Ryan together, mainly for students. 
But it's gonna be a good fit for anyone who's curious to see how they can take the, your ideas off the 
ground and turn them into real fundable companies. So, definitely take a look at the description up this episodes. There will be plenty of good stuff. There.