This is the beginning of the season of events. TiE Chapters, VC Circle, Your Story, Unplugged, IAN, MA, incubators the list is endless. All of them are all putting together events that focus on entrepreneurship. It is a great place to network for early stage founders, potential recruits, wanna be entrepreneurs and of course VCs. There will always be a few sessions on fund raising at all these events.
Two questions that always come up during these discussions.
When is the right time to reach out to a VC?
I am of the opinion that there is no one best time to meet a VC. In India, there are not many funds that back companies which are still on paper. Most funds will look for some validation from the market for your product or service. We at our fund track companies that are very early for us on a continuous basis.We reach out to them regularly to understand the progress and also sometimes push young companies towards certain goals which increases the chances of funding. It also helps us to understand the product, culture and more importantly the entrepreneur better. I would guess it works the same way for the founder too. So that's why I would recommend building a relationship with a few VC's can only help whether you are looking for capital or not.
How do I reach out to a VC fund?
There are over 200 funds in the country working on different models starting from dedicated teams based here to people who fly in and out on a regular basis. Last year at out firm we saw over 1,500 business plans. This I am sure is the case with most of the active funds. Given the size of the teams this is a large number of plans that need to be screened. So to cut through the clutter, the best way is to reach the firm through a referral. Find someone in your network who is connected to these funds. Today with all the social media more channels are open to reaching out to firms whether on Linkedin or twitter.The events provide another platform to reach out. It is not that the other ways don't work, this is the fastest way to reach out. The VC's are also constantly looking out for new companies and entrepreneurs. We have very active outbound program where we reach out to companies based on our research.
One piece of advice for entrepreneurs reaching out to funds, do a little bit of work on the people at the fund. Not everybody will be looking at all the sectors, so it is important to reach out to the investment professional who understands your sector best and has investments in similar domain. One look at the statistics will tell you that most of the time money chases good companies and not the other way round. At out firm we strongly believe that the entrepreneur comes first and the VC next.
Two questions that always come up during these discussions.
When is the right time to reach out to a VC?
I am of the opinion that there is no one best time to meet a VC. In India, there are not many funds that back companies which are still on paper. Most funds will look for some validation from the market for your product or service. We at our fund track companies that are very early for us on a continuous basis.We reach out to them regularly to understand the progress and also sometimes push young companies towards certain goals which increases the chances of funding. It also helps us to understand the product, culture and more importantly the entrepreneur better. I would guess it works the same way for the founder too. So that's why I would recommend building a relationship with a few VC's can only help whether you are looking for capital or not.
There are over 200 funds in the country working on different models starting from dedicated teams based here to people who fly in and out on a regular basis. Last year at out firm we saw over 1,500 business plans. This I am sure is the case with most of the active funds. Given the size of the teams this is a large number of plans that need to be screened. So to cut through the clutter, the best way is to reach the firm through a referral. Find someone in your network who is connected to these funds. Today with all the social media more channels are open to reaching out to firms whether on Linkedin or twitter.The events provide another platform to reach out. It is not that the other ways don't work, this is the fastest way to reach out. The VC's are also constantly looking out for new companies and entrepreneurs. We have very active outbound program where we reach out to companies based on our research.
One piece of advice for entrepreneurs reaching out to funds, do a little bit of work on the people at the fund. Not everybody will be looking at all the sectors, so it is important to reach out to the investment professional who understands your sector best and has investments in similar domain. One look at the statistics will tell you that most of the time money chases good companies and not the other way round. At out firm we strongly believe that the entrepreneur comes first and the VC next.
