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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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How To Respond To A Cold Call Email From An Associate At A Big VC Firm

Comments (44)

We have investments in a lot of companies that are growing very quickly. They end up on the calling (now emailing) lists for a bunch of VC firms who have an outbound deal flow program. These emails ofter appear immediately after a large financing is announced.

Recently, I’ve been forwarded a few of these emails from CEOs of companies I’m an investor in with the question “how do I deal with this?” I realized I was giving the same advice each time so I figured it was time for a blog post on the issue.

The first email that you get looks something like this.

Hope all is well. I want to reach out to introduce myself and reintroduce my firm as you may remember trading emails with one of my colleagues a few years back. I also wanted to pass along congratulations on the round you and the team raised. It is obviously a testament to the continued progress and success you and the team have made since our last check-in.

Given you raised capital recently, I don’t imagine there are any funding needs in the immediate future, but I wanted to reach out to put our firm back on your radar screen. We seek to invest $somebignumberM+ with a huge focus on internet and therefore wanted to reintroduce us as a relevant party for the future. 

If you’re up for it I would love the opportunity to briefly introduce our firm, our strategy and portfolio, and discuss ways we might be helpful in the future. I look forward to catching up.

As a CEO, the real value to you right now is what someone like this can do for you. In addition, they are offering to introduce themselves to you in order to earn your trust and interest when you do a next financing. So taking a meeting where you (a) get a deep overview of them, (b) learn about their portfolio, and (c) ask them for specific help with specific companies in their portfolio is how you make this worthwhile while building the relationship.

My advice is to do the following

  • Go through their portfolio – make sure there are companies you want intros to.
  • Have a meeting – don’t go out of your way for it, but do it when convenient. Don’t do it on the phone – do it when you are with them or they are in your town.
  • Do NOT have this meeting about your company. It’s an intro of the VC firm to you.
  • Do NOT feel compelled to go through your business other than at a very high level.
  • Ask specifically what the VC firm could do to be helpful as you grow.
  • Ask specifically for introductions that you identified within their portfolio.
  • Give them assignments – see if they follow through.

It’s always hard as an entrepreneur not to pitch your company. But resist in this particular case – use this kind of a meeting to learn as much as you can – about the VC firm, and what they know about the market you are playing in, and how they can help you right now. If you give them assignments and they don’t follow through you learn a lot. But if they do follow through, it tells you even more and can be helpful to your business.

  • https://twitter.com/#!/TomLabus Tom Labus

    It’s very hard not be always selling after doing so for a long time. But sometimes, as in this case, it’s best to listen and ask some questions.

    • http://www.feld.com bfeld

      Yup – this is an excellent example of the power of listening.

  • James Mitchell

    Should the company insist that a partner attend the meeting?

    How can you tell if the VC firm just wants to do due diligence on the industry (e.g., they are considering funding a competitor)?

    Shouldn’t the company ask its current investors, “What do you know about X firm?”

    • http://www.feld.com bfeld

      While it depends on a firm and their hierarchy, the answer usually is “yes”. You should identify a few partners who seem like they will fit with what you do or people you want to meet and ask for one of them to come to the meeting.

      Re: due diligence on the industry – you can’t really know this. That’s why – in the first meeting – you should talk very little – don’t say anything more than is already publicly available on you – and listen a lot.

      Re: asking current investors “what do you know about X firm” – yup – excellent suggestion.

      • http://twitter.com/mahorowitz Michael Horowitz

        A lot of comments here seem to revolve around the idea that VC associates are just calling to do competitive diligence and not with a genuine interest in your company. No one’s proposed a very simple solution – ask if they have or are looking at any competing investments. A good firm’s reputation is worth way more than lying to you about this.

        As far as asking for a partner – I’ve got no arguments against asking if one will join, or asking who at the firm is a relevant fit. I also strongly encourage you to weed through inbound inquiries by asking what background knowledge the person has on your company/the space and how their firm is a fit. But I believe rejecting the meeting solely because the person who contacted you doesn’t have deal making ability is a big mistake. Rather than here it from me, here is my partner David Cowan’s take on the matter:

        http://techcrunch.com/2011/06/09/%E2%80%9Ci-want-to-meet-a-partner/

        • http://www.feld.com bfeld

          The challenge – as I’m sure you know – is that some of these programs are sincere while others are competitive intel gathering exercises. The reputation of the firm matters and I’m very comfortable weighing in on specific (rather than generic) cases. For example, Bessemer has a great reputation of not just cold calling for the sake of learning more about a particular market. So – it’s a lot easier / more logical to engage with a non-partner at Bessemer. I could give you a list of other firms that I’d say the exact opposite about.

  • http://twitter.com/msuster Mark Suster

    Perfect advice. It’s amazing how much value you can get out of VCs who are pursuing you / eager to show value. And it’s also a great test of real interest whether they really help or are just fishing.

    • James Mitchell

      I am curious how many VCs would be helpful if you will not be raising money during the next 12 months.

      • http://www.feld.com bfeld

        Only the good ones.

        • http://engag.io/ William Mougayar

          Bingo.

          • http://twitter.com/SeedStagePlans Early Angels

            I had an good experience with Adam’s Capital Management…Ran me through the ringer, helped me work out my issues, and turned me out to the wolves…best thing for me…I realized the holes in my plan and made a new friend.

  • http://freepository.com John Minnihan

    When the inbound contact comes out of the blue (I get lots of these), first identify the person making contact.

    If s/he is a junior associate, they’re just fishing for [x]. [x] doesn’t even matter – they may be researching the industry, cold-calling for future deal-flow, or in extreme cases, just making their daily quota of contacts. Harsh, but true.

    Be polite but don’t waste time. I always request a follow-up from a partner; if it materializes (sometimes it does), then they’re serious abt providing something of value back to me + my business.

    Otherwise, it’s just fishing – and I ain’t biting.

  • http://abdallahalhakim.tumblr.com/ Abdallah Al-Hakim

    lots of good advice. My favourite line is “Do NOT have this meeting about your company. It’s an intro of the VC firm to you.” I think if you go with that mentality in the beginning then you have more flexibility when talking. Once it gets serious then you can start using the company’s profile

  • http://blog.kwiqly.com/ James Ferguson @kWIQly

    Fantastic – Valuable to me as I would have played it all wrong.

    • http://www.feld.com bfeld

      Glad it’s helpful!

  • http://engag.io/ William Mougayar

    This is a priceless list of recommendations. I have been on the receiving end of such emails and can entirely sympathize with the advice.

    Would you treat the same way Angel List requests for introductions? They are a bit less formal (due to the automation), but nonetheless they are made.

    • http://www.feld.com bfeld

      Eh – AngelList is a little more focused since it’s at the early stage and it’s primary function is to connect people.

      • http://engag.io/ William Mougayar

        But the intent of the intro is the same, i.e. positioning for the next raise or seeing if there’s an opportunity, no? I’ve had emails that followed an AL 1-click intro.

        • http://www.feld.com bfeld

          True, but presumably you are listed on AngelList because you are LOOKING for these kind of intros / connections. If you aren’t, why are you on AngelList?

          • http://engag.io/ William Mougayar

            The AL profile stays active, but that flurry I was referring to happened when we were raising.

  • http://engag.io/ William Mougayar

    One more follow-on on this. What do you do when the email comes from an associate or research analyst at the VC firm, and not a partner/manager?

    • http://www.feld.com bfeld

      I’m assuming most of the emails (that I refer to in this post) come from associates. If/when you have a meeting you should always ask to have a partner in the room.

    • http://www.justanentrepreneur.com Philip Sugar

      I have never seen one that was not from an associate. A partner would seek you out directly.

      • http://engag.io/ William Mougayar

        You’re right. A partner typically comes referred from another, although there is the odd exception.

  • http://twitter.com/danielpalacio danielpalacio

    Hey Brad, whats wrong with doing it via phone call? Also what if the e-mail is not from a partner but associate/pricipal?

    • http://www.feld.com bfeld

      In my post I’m assuming the email comes from an associate. If this is the case, you should always ask to have a partner in the room.

      I find that doing these by phone is a total waste. The commitment on the part of the VC is low so you won’t get much info. If they are in the room with you looking at you face to face, you’ll usually get a lot more data – and a sense of the person from their body language.

      • http://twitter.com/martinmignot Martin Mignot

        Being an associate at a VC I’m obviously biased but I think that these two recommendations are good in an ideal world but not necessarily applicable in most cases. If partners need associates to manage the dealflow, it’s simply because they don’t have as much time to spend on it as they’re tied up with plenty of portfolio and partnership commitments (and the more senior/high profile they are, the less time they have typically). So unless your startup is getting extraordinary traction, you won’t be seeing many investors if you only want to talk to partners…

        As for the phone, being based in London and having invested in a few US companies from here, I can testify it can work as well as in person (yes you get less body language but it’s also less of a time/productivity killer for the entrepreneur as going out for a physical meeting).

        One example of that is our recent investment in Nastygal: I spent 2 years calling Sophia (the CEO) every other month before she first met with a partner. But by then we had built a good relationship and the deal only took a few weeks to complete.
        Which shows that whatever the level of seniority of the person, spending time to convert someone inside a VC into a strong supporter can actually be super valuable.

        • http://www.feld.com bfeld

          All good points Martin, especially on building a relationship with whomever you are talking to.

  • http://twitter.com/arbuge Alex Bugeja

    Alternative translation:

    “Hope all is well. I want to reach out to introduce myself and
    reintroduce my firm as you may remember trading emails with one of my
    colleagues
    a few years back. We wish to apologize for passing on your firm earlier
    and not recognizing its potential. I’m sure you realize we’ve been
    punished enough with all that ROI we’ve lost. Will you let us in now?”

    • http://www.feld.com bfeld

      Cute!

    • http://twitter.com/YWorldTweets YWorld

      lol – isn’t that the truth!

  • http://www.facebook.com/profile.php?id=649090084 Jay Plunkett

    This is why I follow you Brad

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  • http://www.yogico.pl/ montaż klimatyzacji

    We are see your cold call email, These Informations are good to see in your cold call email.Thanks for sharing this information.

  • http://jpm.cc/ Jose Paul Martin

    Brad, loved the last para. It’s almost like a dance between two parties. VCs trying not to sound to desperate for deal flow and Entrepreneurs trying not to pitch their companies.

    I’m from another part of the world (i.e outside US) where there are plenty of companies looking for growth, and hence the sea-saw has swung to our side (VCs). Nevertheless, as a director I still go out of the way to research the companies I’m looking to invest in (or try to invest in) and make a warm call. Sometimes you find the best companies this way…

  • Carl Brackpool

    Brad, was just catching up on week and decided to come off sideline on this one. Don’t know why, but the CAP’s, in “Do NOT have this meeting…,” keep festering in back of my mind. Is there some subtext I’m missing, relative to Legal? Could be wrong, but I’m thinking that this came up from a specific event, either current, or in previous Foundry/Mobius investments where an outside (friendly or not) VC decided on an end-run around the prime investment partner (you) or syndicate…and once the “specific company meeting” was taken it created an uncomfortable or costly action to unravel. Frankly, the bait is pretty compelling and filtering out the snoops from genuine and sincere motives is exhausting and a time suck.

    • http://www.feld.com bfeld

      No subtext nor any legal issue. It’s a filter – remember, the email ended with “If you’re up for it I would love the opportunity to briefly introduce our firm, our strategy and portfolio, and discuss ways we might be helpful in the future. I look forward to catching up.” So let them!

  • http://www.DomainRegistry.com LE

    “Have a meeting”

    “Ask specifically for introductions that you identified within their portfolio.”

    Any reason not the get some assurance that they are willing to do the intros before the meeting? I’ve had cases (not related to this) where a salesman (and they are salesman, right?) wants to get in front of you will the sole focus on what is good for them, and not you. Might as well make a condition beforehand. After all the meeting was their idea.

    “Give them assignments – see if they follow through.”

    This is key and a good way to find out whether they are just firing a shotgun or a rifle in their marketing approach.

  • John

    Overall, this post says to look into their portfolio to make connections, don’t talk about your own company, and return the call to be “polite”.

    It’s well-met, but it doesn’t really dive deep enough into why talking to investors is good in the first place. The concept of making great connections with portfolio companies is fine, but if you’re in the growth stage, you’ve likely identified any of the worthwhile strategic partnerships to pursue independently. It’s rare that a cold-calling VC will also happen to be an investor in a company that you haven’t been able to connect with.

    First, any VC’s portfolio is going to be other startups; any strategic partnerships with other startups inevitably devolve into “mutual referral” territory, which is next to useless. It also forces you to stick your neck out for a company that may not exist in a few years (this goes for us, as well as them).

    Second, it’s impossible not to talk about your company when it’s the sole reason the associate cold called you in the first place. How do you block and bridge that momentum?

    Third, not returning a cold call/email doesn’t make you impolite. I would ask, though, if suggesting “I’m only interested in face-to-face meetings with VCs; next time you’re in City X, I’ll buy you a coffee. Let me know if you’ll be this way anytime soon” is rude :)

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