A Startup Canada podcast hosted by Dr. Sean Wise
In the business world, relationships can be equally important as capital, community, and collaborators. Building these relationships is not always simple and easy. How do you meet investors, and once you do, how do you build and maintain good relationships with them? How do you pitch your idea and stand out from the crowd?
Seasoned venture capitalist David Nault knows that the value lies in relationship building. David found the investing world after his company gained its own VC investment. Twenty years later, David has invested in a number of companies including Tracktik, Chronogolf, VarageSale, and Busbud. From the very first meeting to building relationships that last, David’s experiences as an investee and an investor have given him insight from both sides.
Many venture capitalists were once successful founders, and they often start by joining the firm that founded them. How did you join your venture capitalist?
DN: I joined iNovia after they had funded one of my companies. There was a relationship that had developed, while I was an entrepreneur, so I ended up joining. It is important to be an entrepreneur within a venture capital firm, but also have experience as an entrepreneur yourself.
Other than getting along, what do you like, and look for on both sides of the VC-entrepreneur relationship?
DN: Start by asking yourself some of these questions, can you work together? Are your strengths going to be able to help them? Are you familiar with the market that they are in? Do they have the experience, the connections, the track record, that you are looking for to help build your company? These types of questions offer great direction.
What are other things founders should know in general, that investors are looking for?
DN: You want to get to know the investment scene, even before you start thinking about raising money. There needs to be familiarity and relationships with investors, you need to get to know each other. They need to see you at various events, they need to start tracking you. VCs often track companies before they even invest. We will have entrepreneurs that will reach out and say “Listen, I am not raising yet but I would like to spend 15-20 minutes with you over coffee and just put you on the radar. What we are doing, we think it is going to be big and when we are ready to raise funding, we will reach out again.”
From pitching to coaching, what are the best steps to forming great relationships with investors?
DN: The first thing to do is to understand that not every business is fundable at every point in time. If you are meeting with an investor you might be too early, they might be super busy doing another investment, they might not have time to fully dig in. You have to look at it as a little journey that evolves over time. The investor might not invest in this round, but they could during the next round. As an entrepreneur, you can keep them informed on how things are going.
What are your final tips for working with venture capitalists, seed funders, or angel investors?
DN: A venture capitalist will not guarantee your success, but they can really hurt your chances of success if you choose the wrong one. It all starts with a relationship and you might not close that funding on the first meeting, but think of it as relationship building. Use them for feedback and to help you along the way. Even before they invest, you would be surprised, investors will probably connect you with somebody or give you feedback that is valuable to you and your business.