I was an Entrepreneur in Residence (EIR) at Khosla Ventures for a year. Here are the top 7 things I learned. In each case, there is a suggestion for you as a great founder to present your startup in the most effective way.
I will not give a 30-minute lecture. Have a great pitch deck. Very simple. 10-12 slides. Present it in 5-7 minutes. Leave the rest of the time to clear objections. That is, let the VC team ask questions.
I will not passively participate in the process. Unless the partner really takes control, try to frame the meeting. Let them know you would like to intro for 2-3 minutes, hear their intro for 2-3 minutes, pitch for 5 minutes (or 7, pick a number), and leave 20 minutes for them to ask questions.
I will not end the meeting without asking some questions. Reserve 2-3 minutes at the end for your questions. How would you (the partner) describe us to your partners? Are you excited to invest in a startup like this? Which of your portfolio companies is most similar to us? What do your portfolio companies love about working with you?
I will not end the meeting without a call to action. Usually, the partner will tell you the next steps. Often … you will end up hearing nothing. You might get a written pass, or you might get a request for a second meeting (great!). The in between, where you hear nothing, is what you can influence.
I will not rely on a generic call to action. Try asking some questions to avoid lukewarm interest or a ghosting pass. As the VC: How often do you invest? How many investments in startups did you make in the last 2 years? What is the typical amount you invest in startups at our stage? What is your sweet spot? How do you make a decision? Is there anyone else I should meet?
I will not be offended if the VC passes. A great VC can have so many reasons to pass. They may see 100 deals for the 1-2 that they will fund. Consider your time with the VC as free consulting from world-leading experts. Get the most out of your time, and put them down as a friend of the firm if it makes sense.
I will not assume that this is a one-time interaction. Big VCs see many deals and often see them multiple times. They may pass on you now, but be willing to see you again during your next raise. And they will remember your deck! You may notice VCs downloading your deck hours before they pass. Ensure you did what you said you were going to do in your previous pitch.
Best of luck with your startup. You are creating a better world!
Michael Deem is Managing Partner at Angeliki Fund, a physical and digital private equity infrastructure fund. Previously Michael was an Entrepreneur in Residence for Khosla Ventures, a tier-1 venture capital firm on Sand Hill. Michael was part of the founding team of Ion Torrent Systems, sold to ThermoFisher for $2.3B in 2014. He was the 3rd person and performed all the original engineering calculations. He was the 10th person and director of drug design at CuraGen ($100M IPO in 1998). He started the first `Synthetic Biology’ PhD program in the US. He was chair of a top-10 Bioengineering Department, with responsibility for 400 people and $27M annual budget. Michael is an active member of The National Association of Corporate Directors (NACD).