I've been working on a bootstrapped startup for about a year (applied but turned down for the last YC class). Like most founders, I think it is a great idea and I've continued to work at it because it's something I enjoy doing. Recently we've gotten some traction with a conference invite, some press exposure, and a couple of paying clients due to research we conducted and published on our blog.<p>Yesterday I received an email out of the blue from an investor at a large VC who is interested in speaking with us. I've never spoken with a VC and am a bit nervous about it. Could anyone tell me what to expect in terms of questions they might ask and generally how I might prepare for the call. Thanks!
First, don't be nervous. You've got some publicity, you've got paying clients, things are going well and will continue to go well if you have this call or not.<p>Second, only raise money when you're ready to raise money. I'd make it clear from the start that you're not raising at the moment so the VC doesn't interpret your conversation as a week pitch. Tell the VC that when you're starting your fundraising process you'll naturally get in touch with them.<p>Third, who's actually calling? Is this a partner or is this an associate? Associates are often just gathering information about areas they think might be interesting - they're just looking to get educated / educate their firm, and they figure you'll be willing to help them out for free. Sometimes associates are doing due diligence on a potential investment by calling up competitors and seeing if they say the same things about the market.<p>In general, the conversation won't be that technical. They'll want to understand what you do at a high level, get your opinion on the size of the market you're in, figure out if you're going to need to raise, figure out how you're making money / plan to make money, etc. Don't feel compelled to tell them anything you wouldn't be comfortable telling everybody.<p>Also, it's a two-way street! Ask them a ton of questions about what they're doing, which companies they've been looking at, what they think of your market, who they think your competitors are, what challenges they think you'll face - take everything said with a grain of salt, since you know your business better than they do, but sometimes you can glean interesting bits of information that way.
Analysts are like scouts for VC firms - they're assigned or decide on a vertical, then talk to as many companies as they can in that vertical.<p>If the analyst likes what he hears you may get a shot at the partners who actually make decisions.<p>He'll ask as many probing questions as he can to try to really understand your business. Keep in mind that he likely will be talking to everybody in your space and may well be funding a competitor. Don't let the excitement of talking to a VC lead to sharing information you'd prefer to keep confidential.<p>My advice is:<p>- Ask plenty of questions up front: what exactly is his interest, are they actively looking to invest in this space, what is their typical investment profile, who else are they talking to, how did they find you, what made them interested in you, and so forth.<p>- Keep it brief. Give enough to show you are serious and have real traction, but don't get overexcited and go overboard.<p>- Spend as much time showing why your team is worth investing in as you do showing off your business. Early stage investing is mostly about team, so do your best to show you're dependable, committed, and get things done.<p>- Your goal is to get a meeting with a partner. The person you're talking to is not a decision maker, so all you want from this conversation is to get another conversation with one of the decision makers.<p>Good luck, and if want to chat further leave an address of some sort and I'll get in touch.
I would have a cogent answer to where you see the company going. You need to be able to convey a realistic vision of the company's goal and the path to getting there. And that destination needs to be large enough and lucrative enough to justify a minimum VC investment.<p>You may have a team of talented hackers but if you don't have this vision, you could very well end up hacking away at a product which fails to grow b/c your actual market size isn't big enough, you're target customers don't need your product, or they don't want to pay for it.<p>So you'll need a justifiable answer to your market size and who would actually open up their wallets to pay you.<p>Lastly, don't bullshit him/her. VCs see through this pretty easily, so be confident in what you know, and honest about what you don't.