Ivan, to continue our conversation from last episode, we were talking about should you push strap or should you raise money from VCs? And let’s say someone wants to raise money. How do they go to find venture capitalists? Do they just Google <laugh>? I know the answer, but I have to ask, right? I have to ask all the, all from the audience behalf. How do they find, uh, these VCs and, and how do we even approach them?

Uh, so the first question, uh, you have to ask is obviously what stage the company is in Yes. And how much they need to raise. Then you have to, um, ask what sector they’re in. So every venture fund has the, the following criteria stage. Mm-hmm. <affirmative>, check size, sector, and geography. Mm-hmm. <affirmative>. So that means by the time you decide, um, what stage you’re in precedes seed series A, what sector you’re in and what geography you’re in, and so on and so forth, and how much you want to raise, that gives you the profile of the VBC you want to meet. And with that profile, you can do a general search and find out. It does take a time, a little bit of time, but you can figure that out. Every venture fund, for the most part, has that criteria on the website, but there’s sources that you can have online. There’s lots of them. And we can help with the audience with that later. That allows you to really do a search and find out which are the appropriate VCs for that profile.

And the last thing a founder wants to do is sometimes, because we see these mistakes all the time, that they are pitching to the wrong VC.

A hundred percent.

It means that they have of that they have not done their homework. They’re too lazy. Right. Let’s say that, let’s say a certain VC focuses on healthcare and they’ve got a consumer thing. They’re like, Hey, I’m looking for X amount of dollars. Well, we don’t invest in this sector. Correct. It, it’s just, it is a waste of your time, its a waste of their time.

And it’s also a complete, complete, uh, uh, lack of credibility. Yeah. Because that entrepreneur will never be welcome in that fund again. No. So if you don’t do your diligence upfront before you get in front.

We’re talking Google, go to the website, check out the portfolio. I mean, it takes you like 10 minutes.

And one of the biggest ones is the check size. Yeah. You’re raising $2 million. You can’t go to an HIG and or you’re raising a $30 million round. You can’t go to a bullpen. Yeah. So the check size is extremely important. Geography can be a little bit loose, but the check size and sector, for example, there’s certain funds like us, we do software only. You can come to us with a direct to consumer brand.

You can’t, we’re not the right companies.

So first and foremost, understand what is your profile and who are the right institutional investors for that profile. Number one, and don’t do anything for that. Number two is getting in front of them. Um, don’t do it cold. And the reason I’m hugely against a cold approach to a venture fund is this. If he cannot find someone to get to me, how is he going to find someone to get to the next round? Yeah. And the round after that,

It shows they lack the abilities

They lack the ability

Build network

To build the network. They, that means how are they going to find the best employees? Yeah. How are they gonna find the best customers? So that ability to get to me through a warm introduction mm-hmm. <affirmative> demonstrates to me their ability to get to the right people at the right

Time. And they’re

Resourceful. And they’re resourceful. So it’s for that reason. Yeah. Not for ego or anything else. Yeah. So it has to be warm. So how do you do that? And that’s the hard work. It takes time, but generally speaking, I never ever take a cold email or a cold call ever because of that reason. But if a friend that I know says, Ivan I would like you to introduce to someone, I will take it.

Which is the deal we’re we’re looking at tomorrow. Correct. It is through a warm introduction.

Warm introduction. Yes. And, uh, even if they’re not the right fit for us, we will try to help them.

Yes. Because it’s a warm introduction. We’re like, we’ll, we’ll take a look. We’ll talk to the, the ceo. We will, we’ll do some due diligence.

So the other thing is when let’s say you have done the right profile, you have found the right profile venture funds for you, and you’ve gotten the right introductions to get in front of them, make sure you check their backgrounds, you check their existing portfolio companies so that there’s no competitive companies on the portfolio assets, and call a few CEOs of the existing portfolio companies to learn about them before you get in front of them. Mm. And that shows that you know how to do the diligence and how, how you speak the language. And that immediately raises the bar for you compared to the others.

Mm-hmm. <affirmative>. Then when you are in front of someone like us or another vc, then we know, Hey, you’ve done your homework.

You know how to do the homework. Yeah. And you’ve done it

And you’ve done it the right way, the right way. And you’ve connected with us the right way. So then we are much more likely to, to listen to you, to your pitch.

And the most important thing is at that point, it’s not a question of whether we want this person or not. The question is this the right thing for us to back? Yes. Because all the other questions are already there.

Yeah. So that answers the question, where do you find VCs to pitch your next billion dollar startup? Until next time, happy, happy, beautiful hunting.

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