Befriend an Investor.

by Vijay Anand

When should you go meet an investor, say hello and buy him a cup of coffee? Anytime, and hopefully at a time when you arent bootstrapping a company.

An entrepreneur in residence today asked me how come most companies in the valley, and even a few companies here in India manage to raise millions of “dollars” in funding for their first round when I keep advocating on raising not more than what is required, raise valuation and then go for their second round.

Well, that advocacy and advice depends on a lot of things, the vertical you are in, and the nature of the business (some require huge upfront investments, while others could be grown organically, while others need to be grown on steroids).

Coming back to his question though, my answer was that, if you do a case study of all those entrepreneurs you will definitely find something in common with all of them. It is most probably a case that either they built a fabulous product (were the creators of Gmail or something on those likes), or were known to the investors much earlier than the time when they start knocking doors. There is also the case that being married to an investor works, but I suppose that would fall under the second category anyways!

I am sure you are giving me the evil eye right now asking, “If I am not looking for funding, why would I go waste time with an investor?”. Well, all things said and done, if someone has access to all those Gartner, McKensie and all the trend analysis, and spent countless hours of debate and discussions with some very smart people, its the venture capital firms. And as much as its taken to their negative persona on their number crunching skills, if you sit with them without an agenda of asking them money, you would be quite impressed with the depth that they possess – ofcourse I am talking about the ideal VC here (there are too many fake ones also roaming around dressed as Venture capitalists).

There is a very recent story floating around the web, that the founder of Disqus the weblog commenting system had known the investor for ages. He met him some very long time ago, and they shared a discussion about the investors blog and what all can be done to make somethings efficient. On signing off, they shared some urls, and had been in touch ever since. A few months ago, the founder bumped into the investor and gave him the link to disqus to try it out. When the investor came to know that they were trying to raise funds, he didnt spare much time to call them up and write a cheque. If the credibility is established towards deliverables and clarity, everything becomes much easier, and that is something that is only built over time.

So My advice. If you are thinking about starting a company, just retiring, or want to go catch a movie and want company, call up a VC and see what he is upto. The relationship with the right investor is one that is built over a period of time. This is a long term investment you will not regret.