Unfortunately, “quality over quantity” does not apply in the venture capital business. Your company may speak with hundreds of companies before closing on a small number of amazing transactions at the end of your due diligence process. However, the difference between 10 and 11 great closes might represent millions of dollars. You must find a way to retain both quality and quantity.
Concentrate on Candidates Who Fit Your Objective
When it comes to finding deals, you get what you ask for. By properly communicating your investment scope and approach, you boost the likelihood of receiving applications that match your vision. You will also save time examining and responding to those that do not correspond with your company’s goal or portfolio management approach. Keep these pointers in mind as you consider which companies might be a good fit for your company.
- To be clear: Describe your investment methodology, present portfolio, and track record, and explain what type of investor you are.
- Tell about your experience: Communicate pertinent information, such as your company’s previous experiences, recent success stories, trends, and technology of interest to you.
- Improve your reach by: To ensure that up-and-coming startups can find your organization, use networks.
Make Use of Your Network
The network effect is important not just for creating introductions to new prospects, but it also has a significant impact on co-investments and deals collaborations. The world’s finest networkers and super-connectors cultivate a diverse network of ties from which they may draw when needed.
Take Part in Your Startup Community
Prospective founders can be approached in a variety of ways. Attending Demo Days at accelerators and incubators, as well as other meetups like speaker nights, investor meetings, or launch events, whether in person or electronically, is usually worthwhile.
This is still closely related to exploiting your network at its core, but discovering direct linkages to new connections makes it much easier. The idea is to attend events where you may meet people and promote your brand. A good reputation will make you more approachable, which will lead to more honest talks and improved deal flow.
Scout Actively and Learn Everything You Can
Engage with key leaders in the areas of interest to immerse oneself and aggressively hunt potential start-ups. Events and meetups are ideal for this, but you can be more specialized. Engage with people on the cutting edge of high-tech, such as technical and bioengineering universities or high-tech supporting institutions. Your industry expertise should expand in tandem with your network.