PS#034: How to Prepare for a First Call (Part 2)

 Last week  we started talking about how to prepare for first calls.

Today, we’re going to walk through building a plan for those first calls.

Once you’ve made the initial requests, reviewed the materials, and completed your basic research on the company/team, it’s time to build a plan for the call.

As I mentioned previously, having a plan can drastically improve the quality of your first conversation with a startup (for yourself and the founder).

In my early years as an investor, first calls were always a bit intimidating. You’re going into a conversation with someone who (in many cases) has spent years building a particular set of skills designed for this space or building businesses.

More often than not, they are the expert on this space and business. Not you.

I found having a structured plan made it a lot easier to gather the information I needed for my evaluation process, while also making sure I was clearly communicated with the founder.

Today, I’m going to share that process, which includes the following…

• Intro

• Agenda

• Key questions

• Outro & next steps

Let’s get started.

The intro.

The intro is important.

It sets the tone and context for the conversation.

I always wanted my introduction to provide some context on myself, my firm, and generally why the conversation made sense in the first place.

The first two parts are relatively straightforward. You want to be able to provide an elevator pitch for yourself and your firm so that the founder has context. I’ve found that most VC firm websites say a lot of the same buzzwords, so it will be up to you to separate yourself from the pack.

This brings me to the last item I mentioned – why the conversation makes sense in the first place.

If done correctly (due to your preparation for the call and work you’ve done on this thesis), this can really give you a competitive advantage against other investors.

Essentially, it’s about personalizing your message to the founder and/or startup.

Why does this make sense? Do you or your firm have a specific experience, connections, or skills that fit well with this opportunity? Have you done extensive work on a thesis that fits this startup? What makes your capital different from everybody else?

If you can tee this up in the beginning of the call, you’ll be off to a great start.

Set the agenda.

Once you’ve given your introduction, I typically wrap it up with a quick agenda.

In most cases, I keep this pretty high level to make sure we’ve set the direction, but can let the conversation flow. It will often be customized to cover the following…

• History of the firm/idea

• Current status of the company/traction

• The vision for the company and/or solution

And, finally, I’ll ask two things: (1) if there is anything they’d like to add, and (2) if they have any questions for me before I hand it over to them to provide their introduction and move through the agenda.

That second point is pretty important.

I want to make sure that we (as the investor) set a precedent of being transparent and upfront in our interactions. It’s something I’ve found to be key to building my reputation as an investor.

If they have any questions, I want to make sure we cover them before we dive into their startup.

Ask the key questions.

Because of all the work we’ve done upfront on the company and the space, I want to focus my questions on the key items I need to learn more about in order to evaluate the startup.

This can really accelerate your evaluation process. If you’ve covered the basics in your preparation, you can move to the meat of the conversation much more quickly. Even better, the founders will enjoy discussing the nuances of their business much more than simply repeating numbers found in the presentation. It leads to a better conversation.

So, as a part of my preparation, I’ll put together questions around what I think would be the key risks for the business. If I really know a space, I’ll come to the conversation with my own point of view on the business, which can often lead to a more engaging conversation.

Make sure you present your opinion respectfully and with an open mind. But, if you’ve really done your homework, bringing your point of view to the table can build your reputation and relationship with the founder.

The outro & providing clear next steps.

For most first calls, you’ll only have about 20-30 minutes.

So, as the clock starts to wind down, you want to be prepared with an outro that allows for any final questions and can provide clear next steps for the process from here.

If the startup is not currently fundraising, you’ll want to have a plan for staying in touch (assuming you’re still interested in the company).

If they are currently fundraising, you need to provide a transparent timeline for your firm’s evaluation process from here onward. Most founder’s will ask for this, but even if they don’t you should give them a clear picture for when you’ll make a go/no-go decision.

None of us like to be ghosted, so make sure you provide the timeline and stick to it (or at least provide an update for why it has changed).

In most cases, I let them know when my partnership will be meeting to discuss our deals as a group and that I’ll be able to provide clear next steps post that conversation. This will typically give me some time to digest the call, do more research if necessary, and discuss with my team.

It allows me to be thoughtful and respectful of their time and attention.

There’s a lot to think about in these first calls outside of simply the tactical logistics of the conversation. Having a plan for the conversation will allow you to focus on those more important items for your evaluation process.