Raising Your Institutional Round: Chapter 14
This is the 14th chapter of my upcoming book, “Move the Needle Anyway(s): Raising Your Institutional Round.” There are a total of 16 chapters. The book is currently with the publishers, however, I wanted to start sharing the content in a form of a series of blog posts so the startup ecosystem can benefit immediately. I hope you enjoy :)
Chapter 14: Partnership Meetings
The partnership meeting is a formal opportunity for you to pitch your company to the key decision makers at the VC firm and address their questions. The partnership meeting will generally be about 60 minutes and will include all the key partners at the VC firm. The purpose of the partnership meeting is for all key partners to get comfortable with you and your company so they can confidently move you to the final stage of the process—the investment committee meeting.
By this stage, you will have all the content you need to deliver your partnership presentation—it is just a matter of presenting it in a compelling and logical way. You can repurpose your deck material to assist you. Here are the key things you need to know to be effective in a partnership meeting:
Understand Your Audience Ahead of Time: Research the investors or partners you'll be meeting with. If you have a good relationship with your internal champion, they will typically help prepare you for this meeting—who the other partners are, what is important for them, what to say and what not to say. You can also ask other founders for backchannels to get their perspective on specific individuals. Tailor your presentation to align with their interests and goals.
Establish Credibility & Status: Always good to establish credibility and relatability right out of the gate. Even if you are deep in the process, it helps to communicate areas of commonality—your research on the partners will help inform this. For example:
Did you go to the same college with anyone?
Are you close friends with any founders they have invested in?
Did you meet any of the partners at a prior startup?
Create a Compelling Story: You want to take them through an emotional journey. For example, highlight how you arrived at defining the problem, some of the key breakthroughs, how that has led to the company you have today, and how exciting the future is. Stories create emotional connections and make your business more memorable. Be sure to pace them into what the world will look like in the future your company is creating, and what that will mean for everyone involved in your company. You want people to infer that their involvement will raise their status and help achieve their investment goals.
Clear Business Model: Clearly show how your business is and will be a revenue generating machine. Investors are financially savvy and ultimately have a duty to generate returns for themselves and their investors (LPs). Once you have gained their emotional buy-in, you need to gain their intellectual buy-in. Be prepared to discuss your revenue streams, pricing strategy, customer acquisition engine, paths to profitability and beyond.
Show Scale and Growth Potential: Show how your business can scale through its product and GTM motions and capture a large portion of the market. The faster you can grow and the more believable it is, the opportunity cost of delaying investment increases.
Practice Your Presentation: Do this in collaboration with an existing investor, advisor, and/or a pitch coach. Now, amongst all your other company-building priorities and investor calls. I suggest you do it over Zoom and record it—that way you can get feedback from other(s).
Control the Frame Around Interactive Dialogue: Encourage questions and engage in a dialogue. Being open to feedback and showing that you can think on your feet are important qualities. But you need to control the frame here—some questions are loaded with incorrect assumptions, so you shouldn’t answer them without reframing the concern or query in your favor.
When answering questions, don’t get too cute if the question they ask points directly to a real risk or challenge you are facing. In this case, be upfront about the risk or challenge and discuss your strategies to mitigate them. And where appropriate, you can even reframe this to, “That’s exactly why finding the right investment partner will be key to us tackling this challenge. Someone who understands the opportunity ahead and wants to help us navigate these challenges.” This shows that you have a realistic understanding of your business environment.
Sometimes, a partner might interrupt you during your presentation. You don’t want this sort of interruption to be chronic, especially if their question is something you will get to answer later in your presentation. Thank them for asking and let them know you will be getting to that in just a second. Even commend them for ‘being ahead’ of the curve here.
Assuming the partnership goes well, the process is mostly out of your hands. They will have had all the information they need to create an investment memo for discussion and voting at their next investment commitment meeting.