Crushing the Introductory Call with a VC
As an early-stage founder, you have a million things going on and fundraising can feel like a distraction. We want to help make it easier for you to get dialogues with institutional investors off on the right foot. The first conversation you’ll have with a VC is often a short (~30-minute) Zoom call where both parties aim to assess potential fit.
Here is what you should expect to cover during the call:
Introductions: these are typically quick, but still a great opportunity for you to establish your relevant background and experience in the vertical you are building in.
VC Firm Overview:
Expect to receive a rundown of the VC firm’s strategy, focus and (ideally) basic outlook on their your market.
VCs will likely cover these points, but you’ll want to look for:
What type of businesses does this firm invest in?
What stage or company scale does this firm specialize in?
What check size does this firm write?
Are they actively investing with dry powder in their fund?
How many funds have they raised / how experienced is the firm?
How do they help post-investment?
The Elevator Pitch / Founding Story:
Here, you can set the stage for the broader market opportunity by providing a concise summary of how the problem was identified, the solution being built, the nature of the customers being served, and the differentiators from other solutions in the market.
Seek to answer both the ‘Why’ of the opportunity and the ‘Why Now’, as investors will want to understand both.
Expect questions about the founding team, including background, experience, and current roles within the company.
Traction and Metrics:
Providing at least high-level financial info is crucial in determining whether your business is at the right stage for this particular investor. A few key metrics to have at your fingertips:
Revenue / ARR (prior year-end, current, and expected at year-end)
YoY growth
Customer count
Gross and net retention stats
Gross margins
EBITDA and cash burn
Note: if you are not currently fundraising, it’s okay to stick to basic historical revenue figures and politely withhold further details. This should be enough to ensure it’s worthwhile to continue the mutual courtship.
Funding Dynamics and Timeline:
Be prepared to explain the current capital needs of the business and the expected timeline for the next potential fundraise. If you are not currently fundraising, it’s okay to say you are still codifying your plans.
Also, be prepared to speak to the company's funding history to date, the valuation of the company at the last round, the current board composition, and the current investors.
Wrapping Up / Next Steps:
It’s always impressive when a founder can wrap the conversation by cleanly reiterating the recent momentum and “wins”, as well as the critical goals of the business over the next 12 months.
Both parties should come away from the call with actionable next steps. In early-stage technology investing, this often involves a reminder to follow up if the timing isn’t right for an investment.
Alternatively, the timing may be perfect, in which case it will be time to share some preliminary diligence materials, typically through an invitation to a data room (check out our tips for a crisp pre-term sheet Series A data room here).
Misc. / Other:
Often times these conversations will naturally flow into related topics so be ready to dive a little deeper into subjects like:
Market
Team
Product/tech
Maybe even a quick demo
Additionally, we also see these calls get derailed sometimes, so here are some common pitfalls to avoid:
Financial literacy – know your numbers and know what they mean. If you don’t have a financial background, spend a bit of time online and learn the basics. It will be an instant credibility hit if you aren’t familiar with basic terms like ARR, GAAP, gross margin, or burn rate.
Getting into the weeds – This is an intro call, there will be plenty of time to learn about the ins and outs of the business so best to stay high-level and only dive deeper if very specific questions arise.
Regurgitating your deck – tell a compelling story, don’t just read off the text on your slides.
These calls are not a one-way street; you should do as much assessing of the firm as they are of you. We recommend preparing thoughtful questions for the investor and keeping detailed notes of each conversation you have so that when the time is right to fundraise, it's seamless to pick up the conversation. Remember, the best partnerships are built on mutual understanding and shared goals. Even if the time isn’t right for an investment, an introductory call can be the beginning of a great working relationship.
All the Best,
The Vocap team