A VC in Vacationland

When VC’s plan a trip to meet with their investments, they often refer to the event as "visiting my money".  In truth, they are visiting all their partner’s money as well, and the "my" word seems a bit high minded and out of place in the phrase.  Whatever. 

The normal drill is that the company prepares the high level overview presentation, software demo, and sales/marketing data for the visiting dignitaries to demonstrate that the money is being well spent.  I have attended numerous such events over the years, and have recently begun to tire of the usual fare.  Do they have a seminar at Stanford Business School on How to Manage Your VC?  If so, it must be popular and the entrepreneurs take it to heart, pulling out their notes on "structuring a visit for your VC" every time their investors come calling.

I have three suggestions for making these visits more productive and valuable to you and your visitors:

• Focus on Networking : If you have correctly chosen your business partners, they should be extremely well connected in your industry and target customer base.  Spend a fair amount of time working on how they can help you get the right kind on meetings with the right people, whether they are with potential customers or alliance partners. You should provide details on what you would like to discuss at these meetings and evaluate how best to approach their contacts.

• Real Live Demos :  Please, please, please don’t give me some hokey demo with made up data.  I want to see your technology in operation at a real client or pilot site.  If it is a SaaS business model, show me the how the single incidence software is performing, for example, in the multi-client environment. In an installed environment, show me a solution where the customer saved a lot of money and/or dramatically improved service using your software/technology. I want to see that your technology is really doing what you claim it is capable of doing.

• Beating the Competition : Do you as an entrepreneur really know what’s going on in the marketplace?  I usually do a Blog, Google, analyst, etc. site search for potential competitors and their market successes prior to a visit.  I often find that many of these would-be competitors are not showing up on the entrepreneur’s radar screen, or that they not fully aware of competitor activities.  I know you guys are busy making your technology work and selling new clients, but not knowing your space is inexcusable.  Be sure to prepare a competitive analysis on a regular basis to avoid embarrassing questions.

I am not saying you should do away with the overview presentation, just make it short and focused. Same for the sales and marketing pitches.  Both the entrepreneur and the investors really want to maximize the value for the time spent and the best way to ensure this outcome is to take advantage of the investor’s network and knowledge through discussions, rather than overwhelm them with PowerPoint slides.

This will also allow you to refocus preparation time on who to target/sell in the customer realm, what new people you need to add to the team and why, whether the investor has any ideas on candidates, and what competitors are doing that could trump your Beta roll out. To me, these are the critical questions that can make the difference between success and failure in any start up company.

Perhaps instead of "I am going to visit my money" ,the phrase should be "I am going out to help my entrepreneur succeed". That should be everyone’s primary goal.