You created your perfect fundraising pitch deck, despatched it to VCs, and now they wish to speak to you. Improbable!

So, what’s occurring on a median intro name with a VC, and methods to put together for it?

Typical founders fundraise 1–3 occasions of their life, every time speaking to 10–30 buyers. The common investor talks to about 3–5 firms day by day, with a whole bunch of intro conferences a 12 months. Unsurprisingly, first-time founders may really feel nervous concerning the assembly, not understanding what to anticipate from the decision.

Particularly if they’re elevating for the primary time. Nevertheless it shouldn’t be like that!

So I wish to assist right here. Over the past 5 years, we invested in 35 firms in our earlier fund and already in 17 from The Games Fund.

I analyzed our calls and picked up information from our portfolio firms who have been speaking to numerous VCs in some unspecified time in the future, and right here is our expertise:

Please notice, The Video games Fund invests in Video Video games firms, so some questions are sport industry-specific, however you’re going to get the concept.

Be sure that to test the profile of the fund you’re speaking to. Test their web site, CrunchBase, LinkedIn, and portfolio. Perceive what sort of firms they fund. Have context.

Mostly, you’ll speak to the funding supervisor in your first name and later with the associate.

Often, the intro name takes about 1 hour, however it’s price asking how a lot time we’ve got for this name.

Questions could possibly be requested in the course of the pitch or after it. We choose inquiries to buyers proper after our intro and inquiries to founders after the pitch.

Typically buyers may politely interrupt you and ask to elaborate on explicit matters and provides them extra particulars. How precisely will matchmaking be designed? Or how would gear have an effect on the participant’s energy and effectivity within the sport? Or how lengthy is the typical match?

Buyers count on founders to have a stable understanding of the sport’s core pillars. Nonetheless, it’s alright to say that to reply this particular query, you’ll need to convey in your Lead Designer or CTO — you’ll be able to present that info in a follow-up e-mail or arrange one other name together with your core staff to have a deep dive into particulars.

The standard name construction is as follows:

1. Investor intro (5–10 min): Buyers briefly current themselves, describing their background, technique, and how much alternatives they’re in search of.
2. Founders intro and pitch (20–30 min). Founders current the funding alternative. Not themselves. Not the sport. The funding alternative that’s price investing in, whereas the founders’ background, the sport idea, funds, market evaluation, and every thing else ought to help this gross sales pitch.
3. Questions and dialogue (20–30 min, however typically as much as 2 hours!)

Bear in mind that you’re additionally anticipated to ask inquiries to buyers in case you’d prefer to.

What buyers may ask:

1. Why is your sport completely different? What’s your USP? What are different firms lacking that you simply perceive and might do proper? How will you persuade gamers to do this sport?
2. What can be the preliminary practical and content material scope while you launch the sport in beta or mushy launch?
3. What could possibly be the short-, mid-, and long-term objectives for gamers?
4. How will you measure the mushy launch outcomes? Do you have got any particular KPIs in thoughts?
5. How large is the area of interest for this sport? Who’re your most important rivals, and the way are they doing?
6. What’s your hiring technique? Are any pre-commitments prepared to affix you while you get the funding?
7. The place are you primarily based? Do you have got an workplace or work remotely?
8. Is your organization topic to authorities or-non authorities grants or tax aid applications?
9. What’s your burn charge? How a lot runway do you have got now? What’s your anticipated burn charge and runway after this spherical?
10. What would we’ve got while you spend all the cash from this spherical? What shall be our subsequent step? Subsequent spherical, or going to interrupt even?
11. When did you begin your fundraising? Any commitments but? How do you see the proper spherical composition?
12. What’s your anticipated valuation? Are you able to justify it? What was your valuation on the earlier spherical?
13. What do you count on out of your companions/buyers in addition to capital? What do you not need? How may buyers make it easier to in your journey?
14. What’s your long-term plan for the corporate? Do you wish to promote it in some unspecified time in the future or deal with dividends?
15. What’s your favourite sport? Why? What do you concentrate on the present market as a client?
16. What are the main challenges for this enterprise? What may go improper?
17. Once we succeed, how large may or not it’s? What’s your grand imaginative and prescient?

What you’ll be able to ask buyers:

1. What’s their supply of capital?
2. How do they work with their portfolio firms? Do they follow a hands-on method or choose to not take part in day-to-day actions?
3. What’s their long-term technique (Principally, why do they make investments? Dividends, exit, or strategic curiosity and potential acquisition down the street?)
4. What are their test measurement, most well-liked stage, and genres? Do they lead or not? Do they take part in observe on rounds?
5. What’s the stage of the fund? If the fund is at the start of its lifecycle, it may make investments extra aggressively and make longer photographs as they’ve extra time. The nearer they’re to the top of their fund, the extra cautious they are going to be. And it additionally would have an effect on their expectation for the exit timeline.
6. Do they play video games? What sort of video games? What do they do and don’t like in video games?
7. What do they give thought to future tendencies and challenges?
8. What is going to they do if a disaster occurs?
9. What are they in search of and worth in firms and in founders? What are their pink flags? (you can find ours here)
10. What does their decision-making course of appear to be? How a lot time does it take? How a lot time the entire deal often takes?
11. Who will you be coping with after the deal closing?
12. What’s their finest funding up to now?

Buyers are individuals, and you’ll cope with individuals, not summary companies. It’s essential to know if it’s a match.

So, what occurs after that?

Often, the analysis course of takes 1 to 4 weeks and will embody a number of interviews and requests.

You may be requested to offer extra info: company budget, hiring plan, prolonged presentation, information room, design documentation, go-to-market technique, PnL, and many others. (you can find our templates here). There could possibly be a request to have one other name together with your management staff. You may be requested for references out of your earlier colleagues.

Don’t be afraid to share info. Don’t ask to signal NDA. Don’t breach the NDAs you’ve signed. It would really feel uncomfortable, however no person is stealing concepts, and your energy is in execution and talent to generate new concepts. And no person needs to be forcing you to reveal info you legally or morally can’t.

We additionally felt that after we have been fundraising and pitching our fund to potential buyers. And we’ve got over 40 buyers who mentioned sure, so you’ll be able to think about what number of pitches we’ve made. And a few individuals have been dishonest, had no intention to take a position and simply collected info from us. Sure, it doesn’t really feel good. Nevertheless it doesn’t matter. What issues is to be sincere and clear.