One of the questions that I get often from entrepreneurs (especially those raising seed rounds) is to make introductions for them to investors, which I’m always happy to-do. Making GOOD introductions is a key part of my strategy to helping the start-up ecosystem thrive, and hopefully helping great entrepreneurs get one step closer to the dream of building a really awesome company.
I always ask founders who they want to meet and why — with the WHY being the most important question. All to often, I get a laundry list of every guy in town (which generally constitutes the teams “strategy” of ask everyone with a pulse). Personally, I think founders are wasting a shit load of time (which they typically don’t have) and energy (that could be dedicated to actually building the business) with this strategy — and frankly — showing that they’re strategic thinking skills are, well — non existent . There should be a base of questions that a founder asks themselves about every potential investor — BEFORE they add them to the list of folks that they want to go after. Here is my rank ordered checklist:
1) Where are the areas that I need the most help (generally also where I have gaps in the teams skills). Who are the folks that are known experts in those areas?
2) Using the list above, do they invest in my space (hint: look at the investments already made)
3) Do they invest at my stage? (not every institutional investor does seed deals, for instance). Do they invest w/ my preferred deal type (convertible note –or– priced?).
3) Are there competitive or synergistic portfolio companies (hint: investors love synergies among their portfolio).
4) How many investments has the firm/investor made? Do they realistically have the time to spend working with me on my business? (remember – you’ll need more HELP than $$ to build a great company — pick folks that optimize on the help side).
5)Does the firm prefer to lead/follow? Do I need a lead investor to get them excited? Are they betting on my seed to take a stab at the next round? (important to know, as you’ll want to have some idea as to how fill out your dance card for a GREAT seed round and to tee you up for the series ‘A’).
End result — spend the time up front to pare down the list to the most relevant folks — and don’t waste your time running around town pitching to folks that aren’t a good fit — time matters and it’s better spent put towards your business.