What's the best way to get to know VCs before we need them?
We're a nanotech startup (building a roadside marijuana test) raising a Seed Round now and plan to raise a Series A next year. We hear that it's best to get to know the VCs before actually asking them for money in order to show progress. As it's our first startup, we're not well connected to the venture capital industry. How do we find and establish a meaningful connection with VCs to make our next raise?
Thanks in advance.
--Sean V, Cofounder at Diagnostic anSERS
Most VCs are always trying to expand their network and find new sources or improve existing sources of deal flow. The best way to get introduced to a VC is through an existing portfolio company, so figure out how to make that happen. Most VCs can’t help themselves if you reach out and ask a well-crafted and specific question that doesn’t require a 20 pg report, they want to be helpful. As the great philosopher Pitbull once said, Ask for money, get advice. Ask for advice, get money twice. It does make an investing decision easier if you have built a relationship with a VC, they want to invest in people they know and trust. Even sending an email about what you are doing and how you plan on building your business over the next 18 months and then including that person on your investor or quarterly/monthly updates, keeps you fresh in a VCs mind and will help speed up the process when you need money. That being said, it is a balancing act. Don’t spend all your time getting coffee w/ VCs who are interested in your stage of company. The best way to raise money is to build a great company. Also there is a really great cannabis focused accelerator in Oakland called Gateway. I'm a mentor there and highly recommend it