Startup Syntax: Venture Teams
Venture capital analysts and associates are key influencers often overlooked by founders. Clear communication empowers them to champion your deal to partners.
TLDR
Venture capital is a team sport; don't disrespect or ignore anyone. Make your pitch clear so others can champion it as a credible venture deal.
Overlook
Founders may all too often overlook Venture fund analysts and associates and want to go straight to the top—the GPs—thinking they’ll bypass the noise and head straight to the decision-maker and get investment faster. But that’s not really how VC works.
Sure, a GP might occasionally source a deal directly. But more often than not, if a deal hits their desk, it gets handed off to an associate. Why? Because it’s the analyst’s or associate’s job to screen opportunities, run due diligence, and champion the ones they believe in. As admins and assistants are to corporate executives so VC analysts and associates may have far more power than meets the eye.
Never underestimate VC team members who are the first point of contact. They can be a powerful force in your corner if you treat them with respect, provide clear and credible information, and respond in a timely manner.
Roles
Analysts and Associates:
May handle initial deal screening, research, and due diligence.
May be gatekeepers to the decision-makers (GPs) and manage a high volume of deals, filtering the best ones for deeper consideration.
Principals:
May be closer to decision-making and may have more influence over investment committee discussions.
May take a more active role in evaluating deals and driving them internally.
Credible
A clear, credible, and compelling Venture narrative may be lacking from a deal.
Even if the VC’s front line team loves you, your team, and your company, they can’t champion internally what they can’t explain. If your pitch is confusing or your deck is unclear, you may have lost a huge internal ally.
As the founder, your job is to make it easy for others to easily explain: "This is a credible founder we need to bet on, and here's why."
Imagine being given not five, ten, or twenty minutes, but maybe one minute or even one sentence to clearly and credibly separate a pitch from the masses.
Remember, the opportunity needs to be delivered fluently in venture capital speak, not the all-too-often provided founder speak.
The venture language and culture are unique, which is why front-line venture capital workers may fight well above their weight class in terms of translation abilities.
It takes time and thought to translate startup ideas that may move those outside the industry while completely falling short in moving the venture capital machine inside.
Teamwork
To founders seriously seeking venture capital funding, please consider:
Refine your narrative: What’s your 10- to 1,000-times return? Why now? Why you?
Simplify your deck: Make your story obvious in the first five slides or less; maybe better yet, one slide with as few words as possible and powerful pictures.
Equip them: Anticipate objections and provide answers the front-line associates can take to the internal investment committee table.
Be responsive: Momentum matters. To the extent reasonably possible, promptly and clearly reply to requests to continue the conversation.
The fund partners might make the final decision behind closed doors, as private equity is private, so it may be the public-facing team that gets your deal in the room.
Summary
Venture capital is a team sport. Founders often mistakenly focus solely on general partners (GPs), overlooking the crucial role of others. Frontline VC team members are initial gatekeepers, responsible for screening deals and championing the credible. To win, founders should craft a clear and credible venture narrative that resonates with the entire VC team, making it easy for them to advocate internally. Practical steps for founders include refining their story, simplifying their pitch deck, equipping others with answers to potential objections, and being responsive. While partners may make the final investment decisions, it's the broader Venture team that gets a deal done.
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