How Should Someone Approach VCs For The First Time Without Knowing Anyone Or Having Connections?

Before you approach a venture capitalist (VC), you must be aware of what is expected of them. VCs must produce, depending on the thesis in their private placement memorandum to limited partners, say a 7x return in 7 years (generally with padding to a 12-year vintage). If your operating plan does not provide a viable path to yield such returns, do not even bother talking to venture capitalists.

I say that because entrepreneurs eager to raise money generally have no clue who they are raising it from. Nowadays, every person with money to play, even the shark tank judges, call themselves a venture capitalist, without quite knowing what it entails.

The meaning of the term and the implied risk of venture capital have been bastardized into a debilitating form of subpriming, with entrepreneurs eager to raise money forced to turn innovation subprime as a consequence with desperate monetization from producing mind-numbing advertising clicks, fixing self-induced security risk, and fabricating socioeconomic foolery.

Mind you that does not mean your proposition does not have validity. Not all growth trajectories meet the needs of a venture capital risk-return profile. It behooves an entrepreneur to discuss with the investor what their appetite for risk and returns are, demonstrate such by their past performance, and achieve alignment of your unprecedented foresight to help the fund achieve its objectives. Entrepreneurs seldom ask the right questions to ensure the alignment of the upside to avoid internal volatility for years to come.

So, how to connect with investors will be highly optimized by you first doing your homework as to what type of investor would be best suited for your venture. Despite the notion that VCs bask in extreme in-transparency of merit, most of them underperforming, websites like Angellist, CrunchBase, and Pitchbook provide some data-mining capabilities to separate the weed from the chaff in the investment world. Having a more focused approach on who to contact, and how to locate referral or portfolio companies by which you can get their attention should help grease your skids.

What I provide is extensive no holds barred information to help cut through the noise.

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