The VC
"You have a solid idea, it just does not fit our investment portfolio at this time."
The numbness would flow through my body after hearing this response numerous times, I would shake the hands and smile at the end of each presentation, the sweat on my brow slowly dried as the nerves began to relax. It even got to the point where I almost looked forward to the rejection, just to raise my celebratory glass for making it through another presentation! It became a little mental game for me, "What kind of emotion will be on this VC's face as they thank me, while escorting me out the door". One VC actually said "It's not you, it's me", seriously. A couple of VC's were even quite cold - not even a thank you, just a blank stare and then asking staff to see me out.
Being an Entrepreneur takes guts, it takes passion but most of all it will test your sanity to the very last thread of your soul. My experience would be considered sack goods, not Pied Piper, but the foundation is all the same.
Step one.
The idea - You have a great idea that will "Change the world", yeah, they all will. The biggest challenge with any idea is what I claim "inktoskin", this is putting your idea down on paper that will be your last and final hope for having any VC give you a second look, let alone shoveling you your first round. You have all heard stories about the "Big Deal" scribbled on a napkin...and they all live happily ever after. Sorry to land my dirty ping-pong ball in your Chardonnay, but that never happens.
The truth is, most VC's have specific business portfolio's based on the strength of their management team. Whether high tech or brick and mortar, the process is the same. Usually, you will need to have your Executive Summary make it through the first round past the JAG's (Jessica's, Adam's, Greg's), these staffer's are your first hope for moving on, or, moving in-to the blue bucket. JAG's are trained to pour over thousands of ES's seeking "Key Words" that are worthy to move on, based on company criteria. Therefor, it is very important that your ES is dazzling to the point and short! You want to grab their attention and leave them wanting more, example: STEEMIT, a Social Network where WE pay YOU to post! Hmmm, you now have my attention, I would like to learn more about this Steemit thingy.
JAG's are hungry, they are at the bottom of the financial food chain and are starving to make a name for themselves, to move up the money tree, per say. A JAG will sometime infiltrate the startup just to see first hand if the Prize has real potential or just another embarrassing dead seed. When a JAG brings a Prize to the "WOLF" (William's, Olivia's, Laurence's, Frederick's - AKA Executive Committee) the JAG will pace back and forth, patiently waiting and posturing with the hopes of peaking a WOLF's interest and drag the Prize into the next round. This will give the JAG solid recognition and an extra bottle of juice.
{NOTE} Feed the JAG
Step two
The Hunt - this goes both ways, 95% of the time the Prize is seeking the WOLF, the other 5% is usually when the WOLF has been involved with the Prize since birth or introduced by another LOBO during infancy. In most cases the Prize is on the Hunt for the WOLF. I have located their Den in many places, Sandy Hills, Redwood Forests, North Pacific Shores and even Midwest glass towers. The WOLF has made it very easy to match a Prize with a Den, by detailed portfolio criteria located on their sites.
Step three
The Plan - Hey, Congratulations! a JAG has just reached out to you for your Business Plan, great job! The BP is your complete detailed set of plans for the WOLF to begin conducting their Due Diligence in order to proceed or toss the Prize onto the pile of bones out back. Your BP must answer all and any questions a WOLF might ask, so it is best to have as many notable, secure eyes, review the BP before it is ready to print. There are many programs out on the market that will help you format the BP to what is considered a standard outline. The WOLF will review for several different key indicators that will prompt a next step for the Prize. A few of these will include: Business Fit, Model, Type, Financials, ROE, Timeline and Exit Strategy. Remember, the JAG is sitting in the wings hoping the WOLF will take the Prize. (Feed the JAG)
Step four
Setting the Hook - When a WOLF reacts positively to your BP, it is best to set that hook as quickly as possible before the WOLF runs back into the forest. Clear your calendar, because your date with a WOLF could be anytime/any day. Be on the ready, sharpen your weapons because you will only have one shot at the WOLF. If the WOLF has invited you to the Den, make sure you have your quiver loaded, ask the WOLF what is to be expected of the meeting so you can properly prepare and if the Prize has a team it is best to only present with minimal A-teamers or Snipers.
When entering the Den, remember to stay positive, the WOLF has picked you because your Prize is exactly what the Den needs to grow its Pack. Generally, the WOLF will not meet you alone, they hunt in Packs. There will however, be one Alpha WOLF, this WOLF will do most of the talking, while the Pack flanks the Prize. Never loose eye contact and always engage the rest of the Pack. Be enthusiastic, show leadership skills and above all else, believe in the Prize, the WOLF will smell fear and weakness right away. (Do not fear the WOLF)
{NOTE} Do not fear the Wolf!
If the WOLF stumps you, do not, I repeat, DO NOT camouflage the statement, be bold and fess up that you do not have the answer at this time, but state you will have the answer for the WOLF in (choose your timeframe), and make sure you follow through, as promised. The WOLF has offered you a softball lob to test your reaction on how well you handle an unknown.
Step five
the Deal
From here, the path of the Prize ends at an open field, in other words, it is wide open. The WOLF has indicated the Den would like to strike a deal...I will need to stop here. "But why oh mighty Filmaker" (yep, missing an m for a reason, more on that later), well, just because! Because each deal is completely different with hundreds, even thousands of different circumstance, and one statement from the Prize could make or break the deal. The one common action from each Den is determining what size shovel the WOLF will use to shovel the coal to the Prize, in order to stoke the fire. If the WOLF brings out a small hand trowel, well, maybe you need to find another DEN - on the other hand, if the WOLF shows up with snow shovel...
end.
Caveat
This was a fictitious story and should not be taken as any type of advice for raising startup, bridge or second round capital. My only hope is to inspire entrepreneurs to continue to seek your dream and never give up growing and helping others.