How to Approach a Meeting With a Potential Investor

On the Render Capital blog, we’ve talked a lot about a founder’s fundraising journey and how to engage with investors. One of the critical elements of a successful fundraise is strategic, intentional preparation ahead of meetings with potential investors. Often, securing a meeting with an investor in the first place is so difficult that it might be tempting to start celebrating and coast into the first meeting with little thought. But first impressions matter in the fundraising world, and the way a founder presents themselves and the company has a significant impact on attracting funding.

Before getting into the best tactics for meeting preparation, it’s important to state that the very first step, before you even begin reaching out to investors, is to determine the company’s ideal funding plan. First, decide whether your company even needs to raise external capital, or whether you can bootstrap until a certain milestone is reached. If external capital is needed, figure out what type of capital your company will target. Not every company aligns with venture capital; sometimes it’s better to target government or grant funding, angel investors, pitch competitions, accelerator programs, or even debt or alternative financing. It’s wise to spend time researching which type of capital best suits your company based on your business model, current stage, and growth strategy.

For the purpose of this article, we’ll focus on how to approach a meeting with a venture capital fund that has the potential to make an investment in your company, as opposed to a friendly meet-and-greet to build a relationship for a future raise, or a general meeting seeking guidance and mentorship.

Preparing for Your Meeting With a VC

Now that you’ve secured a meeting with a venture fund, it’s time to prepare. First and foremost, make sure you and your team have thoroughly compiled all of your company materials, pitch decks, financials, team information, metrics, roadmaps, and more. You’ll likely be in fundraising mode and setting up many investor meetings, so make sure all of your materials are already prepared and organized in a data room.

Next, any founders attending the meeting should spend time learning about the particular fund. Get a feel for the fund’s mission and investment thesis through its website and marketing materials, as well as through third-party reviews or industry databases. Research the backgrounds of the team members you’re scheduled to meet with, keeping an eye out for common interests or mutual connections. As with any new business relationship, it never hurts to connect on a personal level and ensure your meeting is memorable among the many pitch meetings the investor takes. After doing your research, identify any questions or gaps in information you’d still like to gather and write them down to ask during the meeting.

Confirming Investor/Company Alignment

Once the meeting has kicked off, the most important thing to do from the start is to ensure there is mutual fit between your company and the venture fund. Several factors could impact a fund’s ability to invest:

• Fit by fund lifecycle and deployment timeline. Is the fund actively making investments, or is the capital deployment period over and the investor in portfolio maintenance mode?
• Fit by investment thesis. Some funds develop a specific thesis around a market opportunity relating to the team’s domain expertise, the desires of the limited partners, or a prediction about a technology’s ability to disrupt current systems.
• Fit by company stage. Does this investor stay away from early-stage deals and only invest at growth stage? Does the investor only participate before Series B?
• Fit by industry. Does the investor only consider companies building technology in a specific space, such as healthcare?
• Fit by business model. Does this investor focus on companies with a specific model, like B2B SaaS?
• Fit by geography. Does this investor only consider teams with a presence in a certain region, such as the Midwest?
• Fit by founder demographic. Does this investor focus on a certain founder demographic, such as the often overlooked and underinvested female founder?

As a founder, you should ask the fund representatives to describe in their own words what they’re looking for, and to confirm your company is aligned with their criteria. If you determine it’s not possible for the investor to participate in your fundraise at this time, adjust your planned agenda accordingly, perhaps use the time to ask for general feedback on the business or advice on your fundraising plan.

Avoiding the Monologue

Once you’ve confirmed investor/company alignment, you can really start talking business. This is where it’s wise to follow the lead of the investor, proposing an agenda and asking what would be most helpful for their evaluation process.

One common approach that is quite unhelpful is to launch directly into a pitch deck and give a 10-20 minute generic monologue of why your company is superior. This isn’t to say pitch decks aren’t helpful, they’re essential, but it’s important to determine the right time and place for “the pitch” and let the investor confirm their preference. The investor might have already gathered enough information through your introductory email or website and would prefer to use the time on specific follow-up questions. Or they might prefer to start with the fund’s screening questions to ensure alignment first, knowing they have access to your pitch deck in the data room.

It’s also important to take adequate time to introduce yourself and the team, detail your fundraising plan and timeline, and learn more about the investor before pitching. Venture capital, especially at the earliest stages, is very focused on investing in people. The character and experience of the founding team is a heavily weighted factor, so be prepared for an initial meeting where you’re just learning about each other. This is good news for founders, because it lets you simultaneously vet the investor and make sure they’re the right long-term partner. It’s a common expression in the industry that “venture capital relationships last longer than the average marriage,” so make sure potential investors are checking your boxes too.

Sharing Accurate and Compelling Company Information

There are countless resources on how to hone your pitch, so we won’t spend a lot of time here. But being prepared to answer one-off questions or explain tactics is critical. The metrics and company information you’ll focus on typically depend heavily on your stage, industry, and business model. At an early stage, investors will spend more time trying to understand your early validation and the founding team’s experience and dynamics. As you grow into later stages, investors focus on how things are scaling and the drivers of various startup metrics. Know your company’s story and growth strategy from top to bottom, and if the investor asks something you don’t know, that’s okay. Just be clear about where you think you stand and offer to send estimates afterward.

Mutual Understanding of the Next Steps

Before leaving the meeting, make sure you get a clear understanding of the next steps. Understand whether you’re officially being brought into the due diligence process, and if so, ensure the investors have all the necessary materials. Prioritize any deliverables you owe back to the investors above all else, the faster the diligence process starts, the faster you’ll be getting a check. Ask the investor to clearly outline the steps in their diligence process, where you currently stand, the timeline for milestones, and a possible close date. Also make sure you’re aware of the possible range in check size. As you wait for diligence to progress, balance conversations with other investors and strategize on possible syndicate arrangements.

In summary, every investor approaches a meeting with a different agenda. To give yourself the best chance of securing an investment: (1) compile your company materials and organize a data room, (2) research the fund and the individuals you’ll be meeting with, (3) confirm alignment between your company and the investor, (4) share a compelling company narrative, only after determining it’s the appropriate time, and (5) confirm your status as a candidate for investment and clarify the next steps.