How do I approach a VC?

The best way to approach a VC is with a very short non-confidential executive summary (1-2 pages max). This should be presented after a brief introduction by phone or in person (have a 30-60 second pitch ready at all times). If you believe Malcom Gladwell’s book BLINK, your fate is decided in that first interaction so you need to prepare for that initial contact and ensure that it is a high quality interaction. VCs are busy like the rest of us and will generally pay more attention to those people with whom they have some sort of connection. So if you know someone who knows a VC, an introduction is a good way to get in the door. One of the biggest mistakes you can make is providing your full business plan in the first interaction. It probably won’t get picked up, and if it does, it will likely move to the bottom of the pile unless the VC happens to have a particularly strong interest in your technology or knows of your company from some other source.

What are the essential pieces I need to have before approaching an investor?

There needs to be a unique value proposition for most VCs. This usually encompasses having an “unfair” competitive advantage. You will need some way to protect your idea (patents are generally considered the most effective way to do this), a better solution to whatever problem you are tackling, and a growing market. In addition to having a good protected idea, you need to have a plan for how you will commercialize your product, how you will sell it, to whom you will sell it, and for how much. You also need to be aware of who else is out there competing with you. In short, you need a viable business plan that lays out what you plan to do. Be aware, though, that your plan will need to be constantly updated as you obtain more and better information about your product and its market.

Darren Fast, Ph.D.
President
Solalta Advisors
49 Nutley Circle
Winnipeg, MB R2N 1S2
204-229-8831
dfast@solalta.com
www.solalta.com

Do you have questions on investment options? Send your questions to Katherine Taverner