Our guest blogger, Larry Chiang, is an instructive humorist. If you liked “9 VC’s You’re Gonna Want To Avoid,” you’ll like this submission on some all-important fundraising mistakes to avoid for entrepreneurs.
by Larry Chiang
Who is the biggest fundraising loser (ever)?
And you will benefit from my pain. You are getting nearly ten years of fundraising mistakes boiled down into ten tips in ‘how to work a VC’.
** My fundamental thesis is this: **
“Entrepreneurs need to get benefit while temporarily ‘failing’ at the fundraising process”.
These definitely fall into the category, “What They Don’t Teach You At Stanford Business School” – yeah I’m turning my pain into GigaOm blog posts and even a book coming out 09-09-09.
Why wait for the book, here are my 10 tips.
-1- Set aside your ego.
The business you gave birth to and nurtured into rocky adolescence will get hammered and torn to shreads by VCs. It is time to learn the entrepreneur secret society method of justaposing pain and pleasure.
-2- Know how knowledge flows.
It is like heat transfer and the three laws. Knowledge flows from smart to dumb, experienced to inexperienced and some gets lost (so take some effen notes).
Entrepreneurs need to get feedback and advice but not get mentored by someone who just reads coverage.
Solicit granular advice. Air dropped advice from 30,000 feet lands with a messy splat and scatters. Sometimes it back-fires by landing on a founders head and killing his spirit. Call out rudeness in your GigaOm blog post… oh wait, you do not blog for Om but I do.
-3- Entrepreneurs should never be busy managing VC board member impressions OVER REVENUE GENERATION.
Building shareholder value can be a fart into your office max chair but sales are hard and real. 80% of founder mind share should be pointed answering the question, “How are we making money by solving a problem?”.
-5- How to close for a VC meeting via email.
When you get a good VC contact, the inclination is to draft an AIDA email. A-attention, I-interest, D-decision and A-action. Skip the three paragraph email and send them one ping only. The ping confirms the email address.
-6- Close for a VC Meeting Via Voicemail It is similar to closing a new customer where I outline nine tools in a GigaOm post.
The key is to ask for ten minute conference call via voicemail.
-7- Entrepreneurs can get a soundbyte that advocates them using this hilarious technique I will ONLY tell you at a party.
This works parlaying VC probe meetings into hard-fast funding leads.
-8- How to charm an introduction.
-9- Find and locate your balls.
This especially goes for female entrepreneurs and minority entrepreneurs (ie Asian). Racial profiling is not kosher according to US laws, but character compassing has socio-economic background as a leading indicator of whether you will sack up.
Show some balls and tell them to take some notes during your meeting.
No notes jotten…
Means your meeting went rotten
If you have it in writing, you’ve got a prayer.
If you don’t, you’ve got nothing but air.
-10- Press and speaking engagements don’t always help your start-up.
Remember, we treat VCs like the quasi hot girl who was popular with the boys at Stanford. Once you leave the farm, its a rough world with much less deal flow. We manage the VC similarly when;
- we politely disengage at the first sign of rudeness
- we don’t thank all meetings
- once you’ve shot your research load, you’re done. HOLD SOMETHING BACK
- NO reciprocity, no more meetings or emails
And remember. They’re ignoring you cuz they don’t think you are a winner so build your business while you are fundraising.
-11- Pin the tail on the donkey. Nothing will establish you better and faster than a well measure, well documented biatch slap.
Being mean back to a VC launched a community of entrepreneurs. It is number 13 (not coincidentally crazy #13) in my GigaOm post – 13 o’clock in Shanghainese means crazy.
VC HAWT High School GIRLS
1. They don’t get sold. They buy
2. They love the waitlist
3. They love community validation
4. They have a hard time thinking for themselves
5. They gossip amongst eawx other
6. They hate hate desperation,
7. They do not like false-ness
8. DDSS is like a tractor beam
9. Understated money/treasure/talent makes them 10. They listen with
significant preconceived notions.
11. They love a good party.
12. Who do they wanna date? Whoever the homecoming queen is dating?
13. Can they pick a rising star? Do they make any carry… ever?! School is nurturing but fundraising is not. I wrote about it in, “9 Things Stanford B-School Won’t Teach You”
Larry Chiang is the founder of duck9, which educates college student on how to establish and maintain a FICO score over 750. He is a frequent contributor to GigaOm’s Found|Read (if you couldn’t tell). His earlier posts include: How to Work The Room; 8 Tips On How to Get Mentored ; and 9 VCs You’re Gonna Want To Avoid. You can read more equally funny, founder-focused-lessons on Larry’s Amazon blog.