There are so many things that you need to get right to win over an investor, but getting in the door through someone you know is almost a necessity.  I’ve known this for a while, but never subscribed to it completely.  It’s not that I don’t see it everywhere.  It’s just that I’d like to think that an entrepreneur knowing someone that I know doesn’t make them a better entrepreneur.  I’d like to think that I give everyone an equal shot in my book.

The fact is though, that I’m human and when someone I respect says “hey, this is a cool company and you should check them out” I’m probably going to give it more time and attention than I would otherwise.  I never quite realized just how important this was, though, until I started reading Mastering the VC Game: A Venture Capital Insider Reveals How to Get from Start-up to IPO on YOUR Own Terms by Jeff Bussgang.

In the book, he states that “Of the nearly fifty companies that we at Flybridge Capital have invested in over our eight-year history, not one of them came in cold.  In fact, I polled a number of my VC colleagues on the topic, and we estimate that the odds of getting a pitch meeting from a cold email are 500 to 1, at best.  The odds of actually receiving funding from a cold email: 50,000 to 1.  You are better off playing the lottery.”

I’ve also talked to angels and angel groups in the area that fly under the radar and have no interest in looking at any deal that hasn’t come through their network.  The thought goes that if you were doing something that really was cool, then someone they know would have to know you.  If you don’t have the drive to go out and find someone to introduce you, rather than sending a cold email, then you probably don’t have what it takes to get through to your prospects and turn them into customers either.

Being really sick all week and then being on your feet from 7AM to 11PM sometimes doesn’t help the blogging efforts, but better late than never, I guess, so I thought I’d jot down a few takeaways from last week’s  event.

We had some awesome presenters at the event on Wednesday:

Global Tek Labs – Winner of the Event

CaraSolva

Cleantricity Power

Ripple Reader

Pro Image Software

I can honestly say that I was very impressed with all them.  Some needed more work than others, but they all brought the right attitude.  What really stood out to me was one presenter who probably received more constructive criticism than anyone else.  I spoke to him afterwards and asked him how he enjoyed the event.

Bracing myself for some backlash, I was ready for a comment like “those guys have no idea what they’re talking about and just don’t get it.”  Never mind that our panel was almost entirely made up of people that have built a run multimillion dollar companies.  Some people don’t let reality get in the way of their opinions.

However, he said that they feedback was really valuable and they pointed out a lot of areas of his business he could improve on.  I can’t tell you how impressed I was.  I’ve seen so many smart entrepreneurs get decent advice from would be investors only to shrug it off.  There’s nothing that turns off an investor more.  No one expects you to be perfect, but if you’re willing to listen, learn, and build a better business with their help, they’re a lot more interested.

On the other side of the coin is the sentiment behind the investors’ or panels’ feedback.  Again, I was so pleased to see nothing but constructive criticism that came from people who really wanted to see these entrepreneurs succeed.  After the event I was chatting with one of our panelists and he mentioned how much he loathed some other forums where investors and other people on the other side of the table take delight in beating up the entrepreneurs and just ripping apart every aspect of what they’re doing.  If you’re involved with a group like that and there’s a member that fits that profile, please show them the door.  They’re not helping anyone.

Anyway, thank you to everyone that participated and that came to the event.  I really enjoyed it and I hope you did too.  If there’s a way we can make the next one better, please don’t hesitate to let me know.