Venture capitalists have a reputation for being a tight-lipped and inaccessible bunch. But if you’re an entrepreneur, understanding their investment philosophies can go a long way in helping you get a deal done. Earlier this week, Andrew Romans, serial entrepreneur and author of The Entrepreneurial Bible to Venture Capital, moderated a panel of private investors to explore the mysterious world of venture capital. The panel consisted of Krishna Srinivasan, general partner at LiveOak Venture Partners; Eric Garcia, founder of Harvest Growth Capital; Louis Marchetti, director of business development for Vista Equity Partners; and Pat Noonan, a senior associate for Austin Ventures.
The first step for an entrepreneur in search of funding is getting an initial meeting–a difficult challenge in its own right. VCs get pitched to constantly and time is their most valuable asset. Cold calling or emailing won’t get the job done.
“The best way to get a meeting is through a qualified introduction from someone in my network,” explained Noonan. ”It acts as a vetting process and most VCs operate this way.”
But what if you’re new to the community and have no way of getting a personal introduction?
The best thing to do is to make yourself and your company visible. Go to networking events, participate in Demo Days, and take advantage of social platforms like Gust and AngelList to expand your reach.
Once you’ve landed a meeting how do you impress the VCs? What are they looking for?
“In real estate what matters is ‘Location, Location, Location,’ for startups, it’s ‘Management, Management, Management,’” according to Romans. ”For startups, the network around your company is your company; it’s impossible to overstate that fact.”
VCs are also looking for the CEO to have a clear vision and demonstrate that they understand what the path to success looks like.
“What we’re looking for is clarity on what the next inflection point is for your company,” said Krishna Srinivasan. ”Demonstrate knowledge that you know how much money you need to reach that next milestone and be able to articulate it.”
The panelists were unanimously optimistic about the future of Austin’s startup scene. Startup costs are dropping and entrepreneurs from across the country are beginning to realize that Texas is a good place to do business.
As for which industries are hot– enterprise software remains big; upstream oil and gas is gaining momentum.
Now go get funded!