Nailing the first meeting with a partner of an early stage venture capital firm (VC) is only the first step in a long journey to get funding for a startup. VC partners don’t like to waste their time and the time of their colleagues so competition among startups for VC meeting time is fierce. And this is no surprise. In order for a typical medium-size VC firm to make 10 investments annually they may review approximately 1,200 companies. These 1,200 initial leads typically come from network introductions, conferences, in-bound inquiries, proactive efforts, portfolio company referrals and seed investors. Of the 1,200 leads, approximately 500 are converted into a first face-to-face meetings with a partner on the investment team. In the end only 50 startups get funded annually.
For those startups that manage to move beyond the first VC meeting an understanding of the makeup and general flow of the VC meeting process is critical. The goal of the first and all subsequent VC meetings is to keep the VC partners interested and schedule the next meeting, not trying to close an investment.
The infographic below, created by Nextview Ventures, outlines what it typically takes to move from an initial meeting to a closed investment. A detailed explanation of each step in the VC meeting process can be viewed at the Nextview Ventures website.