Through my experience as a VC at F2 Venture Capital, one of the most common questions I get asked by entrepreneurs is:
“When is the right time to approach a VC?”
Indeed, I often talk to early-stage founders who think that it may not be the right time, founders who worry they are not yet ready or want to keep their head totally in the business before reaching out.
However, my consistent answer to this is:
It is ALWAYS the right time.
We are in the meeting business- to engage, to connect, to dream, and for this, there really is no time limit.
Rather than viewing VCs as a frightening step in the founding process- one that you should approach cautiously only once you have achieved x, y, and z- founders should view VCs as a resource that can help and empower them on their way to scoring funding and building their company.
Even if you truly aren’t ready yet, finding those 30 minutes for a casual talk could result in a helpful connection or valuable feedback that can assist in getting you to that point of being ready!
To this end, it is also important to realize that a decline is by no means a burnt bridge nor a rejection. Every decline a founder receives is a chance to learn, to grow, and to receive helpful direction from the firm.
I love meeting founders who are ready to be funded, but I also love meeting founders who are not there yet- this almost always results in a productive conversation, a road to validation, and the potential to create new and meaningful relationships. We have had founders come pitch us ten times before we were ready to fund them, after each meeting, they came back with a new milestone, a new breakthrough until it clicked!
Of course, this won’t happen with every startup that we first meet- much like relationships, not all founder/investors have the right chemistry- and that’s okay! This still does not result in a burnt bridge, and VCs will be happy to connect you to more suitable investors.
That being said, if you want to know when a VC is most likely to consider you for funding, an easy bet is to check if your startup fills these three criteria:
Have a team
A solid founding team is the most essential element of a startup. Without strong and cohesive leadership, it is hard to imagine or invest in your future success. Founding a startup is, as Elon Musk so eloquently puts it, “like eating glass and staring into the abyss of death.” You will need a strong and cohesive team to share your burden as your start this entrepreneurial journey.
Have a vision
We are in the business of building exceptional companies that will thrive and be worth billions at some point in the future. For this, we need to be able to see a long-term vision of how these founders will get there, how the market they are targeting will evolve, and their place in that market.
Begun market validation
To qualify for funding, market validation is a must. This means talking to customers or potential customers who validate the need your company aims to address. You should understand the pain points and ensure your product is a must-have rather than a nice-to-have, as well as assess the size of the market you aim to address- is it large enough to result in a billion-dollar company?
Smart investors will never miss an opportunity to meet a founder, no matter how far along he/she is with their ideation as it is never too early to get actionable advice, receive direction, and make helpful connections.
So, my advice is- take the opportunity, and never hesitate to reach out.