PS#033: How to Prepare for a First Call (Part 1)
First calls are a critical step in the venture capital deal funnel.
They are the first touchpoint with a startup and often set the tone for the remainder of the evaluation process. Unfortunately, I think a lot of investors miss a real opportunity to build their reputation, theses, and, most importantly, meaningful relationships with entrepreneurs in these first calls.
The key to taking advantage of this opportunity is preparation.
If you’re prepared, you can really leverage that 20-30 minute first call to address the key aspects of the deal.
If you’re unprepared, it ends up feeling like a one way interview.
Over the next two issues, we are going to walk through how to prepare for a first call, including…
Requests
Initial review
Basic research
Building a plan
Let’s dive in.
Requests and the initial review.
OK, let’s set the scene.
You identified a startup that looks promising (one of your leads) and want to move it to a first call. After connecting with the founder and scheduling a 30 minute call, you want to make sure you’re super prepared for the discussion.
So, how do you make sure you’re super prepared?
Well, first things first, request any overview or pitch materials that can be shared in advance.
Sometimes, a startup will have already provided these materials or can easily do so upon request (usually when they are in fundraising mode).
However, in other situations (especially when you’re trying to create an opportunity before a company is officially fundraising), they may not have an up-to-date pitch deck or overview. In these situations, request the latest presentation that they do have or maybe a version of their sales materials.
The point is that we want to get as much information from the company as possible in advance of the call (without over signaling our interest levels).
Once you have this information, give it a thorough review. Oftentimes, these presentations will answer a lot of the surface-level questions investors may have about a company (e.g., problem, solution, growth, traction, team, etc.).
Having this information in advance gives us an opportunity to dive deeper on these topics, especially those we’ve deemed important for the investment.
Basic research.
After we’ve reviewed the materials, it’s time to do some cursory research.
The internet is a pretty powerful tool and we need to make sure we take advantage of it. Since we have information on the company and the team, it’s important that we do a bit of our own research to see if there is anything for us to explore further on the call.
Before a first call, it’s important to check and review the following…
Company’s website
Team & company’s LinkedIn(s)
News searches on the team & company
We’re doing this for a couple of reasons…
Uncover any red flags on the team or company that we should explore
Identify anything that could be useful to building a relationship with the startup
This doesn’t need to take a ton of time, but it can often add to our assessment and give us an edge in our initial discussions. For example, we could use the Wayback Machine to see how the company has changed its positioning over time. Or, we might find some part of a founder’s background that allows us to build a strong rapport on the first call.
This little extra step can go a long way.
Building a plan.
Finally (and maybe obviously), have a plan for the call.
I see this too often. People roll into calls with no plan for what they are looking to learn. It leads to a meandering conversation that ends up wasting everyone’s time.
Remember, for founders and investors alike, time management is critical. For everyone’s sake, make sure that you have a plan going into these calls. You’ll be glad that you did.
It’ll lead to more productive conversations and better relationships.
In our next issue, I’m going to walk through how I think about building a plan for my first calls.
