I recently had the chance to read Venture Capital 101 on a flight from Philadelphia to San Francisco. I thought it was excellent and it was exactly what I needed to become more familiar with the general working of the VC process.

We are not looking for funding - however - we are proactively contacting VC's and selling into their portfolio companies - so I wanted educate myself on the process.

One question I did have that was not covered in Venture Capital 101. If you were a service provider how would you go about contacting VC's? More specifically, our service can benefit their portfolio and we would like to present directly to the VC's and have them plug us in to the portfolio companies!

Regards,

Puzzled in Flyover Country

Dear PIFC,

Thanks for the nice comments, we're happy you enjoyed Venture Capital 101.  As far as contacting VCs is concerned...that's tricky.  Actually, it is one of the reasons behind the creation of Venture Capital 101.  The author wanted to demonstrate what he knows about venture capital.  He also wanted to provide a resource to VCs.

Ironically, as a result of not trying to sell anything to VCs, the author ended up making a ton of great contacts in the VC world.

The most prescient advice I can give is this: If you want to make contacts with people (VCs, or anyone else), have something to offer. Be a resource to others. Take the long term approach. And when I say have something to offer, I mean have something beyond the thing that enriches you.

This is the thing that drives me nuts about many real estate people -- all they talk about is fricking real estate. And if you're not interested in the lousy house or 3-flat they're selling, they have nothing else to talk about. You're persona non grata. It's one of the worst forms of ego-centric behavior.

Business relationships are based on long term, two way conversations, not short term, one sided conversations. If all you talk about is "sell, sell, sell, me, me, me, my product, my product, my product, me again, this will be great for you but the really great thing is it will make money for me," you're going to lose people.

There's nothing wrong with making a buck, there's nothing wrong with "asking for the business," but you have to find balance and find a way to be genuine.

Remember, everyone under the sun is trying to sell to VCs, and VCs are notorious "tough sells."  In fact, I wouldn't waste my time trying to sell to a VC. If you have something a portfolio company can use, sell to the portfolio company.

Just because a VC invests in a company doesn't mean that the VC runs the company! In my dealings with VCs (while working for venture funded companies) the VCs might suggest something (usually at a board meeting), but they do not dictate terms. The VCs believe - rightfully so - that it is up to the management of the company to run the company. The VC might have a little weight in terms of suggesting a certain service provider or solution (often at the behest of the company), but the VC's opinion is usually just one of numerous sources of sound advice the portfolio company seeks. 

Further, VCs often (and quickly) become turned off when someone tries to sell something that supposedly "will help your portfolio companies." What the VC will read is this: "this yahoo wants me to become a de facto sales rep and get the product/service into the portfolio companies."

My advice to you: Sell the product yourself!

Good luck!

Dr. VC
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ERIC STRAATSMA MS
MILI Group Inc.
Creating & Protecting Wealth
2033 Howe Ave Suite 160
Sacramento CA 95825
Office 916-286-7930
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