Investors don’t invest in ideas, products, or markets – they invest in people.
Ask any investor what their criteria are for choosing which companies they invest in and the answer will be that it’s the people. This is no secret among investors and the communities of entrepreneurs that they invest in, yet we see entrepreneurs ignore this principle every day.
I am continually amazed when entrepreneurs think that they can short-cut the process of forming relationships in this process. Entrepreneurs ask why we can’t just get angels to write them a check. These entrepreneurs will never receive funding.
Entrepreneurs who are successful become a part of the community. They get to know the people and they watch how investors respond to pitches. “What questions do they ask?” “Which companies do they invest in?” “How do good companies land the all- important lead investor?”
I don’t know many people who an attend one event and get to know all one hundred of the people who are there. It takes several events before you get to know the key players in the community. Entrepreneurs who are serious about raising money for their companies know that it takes time. They spend time doing the research for their company; they learn about the venture capital process; they create a great pitch and they spend three to six months or even up to a year getting to know the angels and VCs in the community.
Successful entrepreneurs also remain active in the community after their pitch. They realize that the pitch is not the end of the process, but that it is just the beginning. After the pitch, successful entrepreneurs continue attending events and work to develop a lead investor. They are active in the process rather than waiting for investors to come to them. Successful companies continue their involvement actively for an average of three to four months after the pitch in order to circle up their investors into a syndicate and close the deal.
The Rockies Venture Club offers the education and communities for those who are willing to learn and become a part of the community. Those who get involved are a part of the club that raised over $25 million in the past twelve months. The others are destined to keep waiting for someone to do the work for them.
How can you get involved?
1) Attend RVC events and other groups in the area.
2) Join RVC and become a member.
3) Take classes and workshops to build your knowledge of how venture capital works.
4) Take part in the free funding mastermind sessions offered by RVC to help you hone your strategy and learn from others.
5) Volunteer for events to get known in the community and contribute your share to the tremendous amount of work it takes to coordinate events.
6) Get to know the people you meet and ask them out for coffee, beer, etc.
7) Follow-up and stay connected even after your pitch.
Do these things and you will be more likely to find active investor interest in what you are pitching.