Mark Suster explains what to do--and not to do--during your first meeting with a VC.
Don't "tell and sell." The most effective pitches are two-way conversations. So stop talking once in a while and elicit feedback, Suster advises. Raise open-ended questions. Allow VCs to challenge you, and don't respond defensively. And if you don't have an answer right away, be honest. Use it as an excuse to follow up after the meeting.
Point out the elephant in the room...Handle any uncomfortable issues that are public knowledge head on. Maybe you got some bad press or a founder quit. Better to raise the obvious questions yourself--and be armed with answers--rather than let suspicions linger.
...but keep your skeletons hidden--at first. Speak up about public problems, but don't drag out your skeletons during a first date with a VC.
You're ethically obliged to address hidden problems prior to getting funded but not during the initial moments of courtship, Suster says. Just be sure to raise the issues with your sponsor before attending a full partner meeting.
Ask for referrals. If your company shows promise but isn't the right fit, many VCs will happily refer you to more suitable firms. So be sure to ask for referrals at the end of your meeting.
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Don't keep in touch. "Some people think, Well, I update the VC when we have board meetings," Suster says. "But when we have more context about what you're working on in a shorter cycle, we can be more helpful." Early-stage companies, especially, should send their VCs a brief summary every two weeks, charting recent accomplishments and short-term goals.
Focus on one partner. The venture firm that funded you may have half a dozen partners or more. Only one sits on the board of your company. "Almost all entrepreneurs I know just manage that one relationship," Suster says. "That's a big mistake. You have to build a relationship with all the partners." After all, funding decisions are made collectively.
Make it all about the money. Your venture capitalist isn't a wallet on legs. If you treat him or her like one, you're missing a valuable opportunity for mentorship. "Each partner has their own relationships, their own unique insights and experiences," Suster says. "That's a benefit to you. Not tapping into it is crazy."