Feb 22 2007

Don’t Be Casual

Coming out of the Venture Capital in the Rockies conference, I was pleasantly surprised with how solid most of the presentations were.  There was plenty of pre-conference preparation, practice, and iteration from the companies presenting – and it showed.

A few weeks ago, one of my portfolio companies met with a prospective investor.  The company isn’t raising money – they are doing very well – but will be in the market at some point.  The VC they met with has expressed interest in the company several times in the past, is a long time friend of mine, and is a smart, thoughtful guy.

I spent five minutes with the CEO of my portfolio company preparing him for the meeting.  Our time was spent entirely on the background of the prospective VC and some suggestions about how to approach the meeting.  I spent 0 minutes looking at the company “fundraising presentation” (since we weren’t fundraising – it didn’t really cross my mind) and I took the meeting casually assuming the VC would be also be viewing this as a casual meeting.

The meeting was a disaster.  I saw the presentation after the fact – it was a “C” – not horrible, but not very good, and certainly not “VC pitch friendly.”  The VC immediately formed a negative opinion based on being presented with data and a bottoms up corporate presentation (rather than a clear presentation that lead him through the business systematically.)  The result – no interest in having any further conversations.

My assessment of the problem was that we approached things casually.  Even thought this wasn’t a real “decision meeting”, we should have either declined taking it now since we aren’t fundraising (my normal approach), or should have prepared and not been casual.  I wasn’t paying attention because the prospective investor was a long time friend that has consistently expressed interest in the company.  The result – the door is shut for a real conversation in the future.

Simple message – in all fundraising situations – don’t be casual.  The first impression counts a huge amount and sets the tone.  This is obvious, but even after doing hundreds of financings, I blew it this time.