The first rule of venture fundraising is that the purpose of all VC meetings is to get another meeting. It’s not to immediately push a decision.

VCs don’t like wasting their or their partners’ time.  So they’re not going to be conducting multiple meetings if there isn’t a serious prospect of a startup becoming an investment.  Unlike “traditional sales” where there’s an eye towards closing sooner rather than later because a large part of the process is convincing the other party now is the time to buy, VCs (if they have capital to invest) are almost always ready to buy.  They just have a set procedure for doing so which doesn’t really vary that much.

Consequently, founders must understand the general VC meeting flow to understand where they are in the process and how to treat each step.  Below is a general overview of what the typical VC post-first meeting process might look like as a cheat sheet for what to expect:

Pre-Screen Meeting (Optional, But Likely First Step).  Prior to the pandemic, many pre-screen meetings took place in-person. While every firm will have a different style and prioritization about which meetings are over video or in-person, today, nearly every pre-screen call is over Zoom. This conversation is typically quite short (less than thirty minutes) and its intent is just to quickly assess if the opportunity itself is even on the fairway of being relevant to the firm and/or if the team is a level of credibility to be considered.  Often instead of a Partner-led pre-screen, a junior investment professional conducts this conversation instead.  If it seems like there is a potential for a good fit, the VC firm will invite the founder into the…

First “Real” VC Meeting.  With usually just one of the VC’s partners present, the intent of this meeting is to genuinely explore if the opportunity is interesting enough for the firm to take seriously as an investment opportunity. Many firms conduct this first, more-substantive meeting over Zoom; at NextView, we require that at least one (but sometimes more) intermediary meetings like this one be in-person. Whether at this stage or later, the founder should always take the VC’s lead as to venue (Zoom, phone, in-person), but after the pre-screen it’s always helpful to proactively suggest visiting the VC’s office if and when they are going to be in the same city.

Whether it was the referral or a pre-marketing deck which caught the attention of a partner to make the first “real” meeting happen, all VC dialogs begin at the same starting line.  Even if the intent and the founder’s style is to be more conversational than formal in a structured pitch, starting with the deck as a way to frame a conversation is the best way to start the discussion.  And regardless of how an entrepreneur leads the session, the intent is not to immediately ask for a commitment (or even direct feedback).  The partner here is trying the opportunity on for size in her head, thinking through her own objections and flags her partners will raise. Her goal is not to make a final decision.  Instead, the key to a successful first meeting is to be subsequently invited back for a…

Second Meeting.  This second conversation (again, often on Zoom, sometimes in-person) usually involves an additional new second partner who acts as a second set of eyes for the partnership.  From a VC’s perspective, this meeting’s goals include (1) confirming the original partner’s intuition and ensuring it’s not off base and (2) asking follow-up questions about specific topics or issues which surfaced upon reflection in the time period between the first meeting and now.  The entrepreneur should plan to use the same conversation/pitch format as the first meeting.  This approach seems quite repetitive, but the second meeting will likely be 80% of the exact same content in this second meeting.  But, if all goes well, the original (lead) partner will begin a series of…

Diligence Meetings, Conversations, and Deskwork.  Once two partners have decided the investment is worth pursuing, the process becomes a bit more ambiguous and less standardized.  What follows is “diligence” – a series of homework assignments, meetings, and phone calls led by the original VC partner to validate the opportunity and explore any concerns within their partnership.  Sometimes it’s tough for founders to trust if the process is progressing or not. The most visible signal of progress is that it should feel as though interactions are accelerating, rather than remaining stagnant (or worse, a deceleration).  Either the VC is getting increasingly excited and prioritizing this investment over other work on her plate, or she’s not.  While founders should feel free to ask questions about a firm during the earlier meetings, this is also the best time to get to know the VC partner, their style and personality, and how the startup would fit into the investment strategy of the firm.  If the diligence period goes positive for the company/team/entrepreneur, a common next step is a…

Broader Audience Meeting.  (This meeting is often optional.)  Depending on how large a VC firm is, in particular in multi-sector/multi-stage/multi-geography partnerships, occasionally it’s necessary from an internal process point to loop in a larger set of the investment staff to the startup’s story even prior to the final partner meeting (more on that below).  In other words, it’s a time to “meet the NYC investment team” or “meet the whole consumer internet-focused team,” and usually this step only occurs at larger firms with larger investment teams where there are more people required to buy-in to the opportunity.  The purpose of this broader audience meeting is for the original lead partner to socialize the investment now that it’s building steam in order to uncover any lingering questions from others so they don’t unexpectedly surface later on.  Even though it’s a complete repeat for the founder, the same initial presentation, taken from the top, should be used again.  As you work towards a final decision, next you can expect the…

Partner Meeting.  Most often, this moment after which – finally! – “the decision” is made. You could argue every previous meeting is equally as important as this one, as they’re interconnected, but the partner meeting is the most important single interaction.  In smaller firms where communication is more free-flowing (like here at NextView), this pitch can be more confirmatory than evaluatory. At NextView, we conduct the full-partner meeting over Zoom to level the-set the interaction across all three (SF, NYC, Boston) offices. Iin larger partnerships with more distributed actors but central decision-making, some investors will be hearing your story first-hand for the first time, thus the outcome of this meeting can be quite volatile.  Typically by this point, the lead partner has transformed from a skeptic into an advocate for the investment, building a sincere rapport with the founder along the way, and may (hopefully) prepare him with tips and guidance on effectively navigating this meeting.  Only now should an entrepreneur convey the direct “ask” and suggest a definitive decision soon.  Almost always, as soon as the entrepreneur leaves the (virtual) room, the firm’s investment decision is immediately discussed.  If there is mutual interest in proceeding, and, after any necessary back and forth around the specific ask concludes, a positive outcome for both sides is to hold a…

Denouement Meeting.  Once any firm has made an internal decision to invest, they don’t want to lose out on the opportunity.  Very quickly the tables turn and often a VC requests a follow-up (sometimes in-person) meeting to present a term sheet, talk through terms, sell their firm, and also sometimes conduct “confirmatory diligence” (dot the I’s and cross the T’s on diligence questions, though this won’t affect the outcome).

Especially during the early days of a startup, we at NextView believe the fundraising process is about finding true believers, not convincing the skeptics.  By the end of the above process, there should be a shared perspective between founders and investors about the vision for the company and how the relationship will work.   Although the visible consummation of the process is a term sheet, the real outcome – alignment with a supportive partner – is even more important.