At this year’s Pirate Summit in Cologne, I had the pleasure to listen, amongst some other great talks, to Fred Destin’s keynote about fundraising. After working for Atlas Ventures in Boston for 10 years, Destin is back in Europe as Partner at Accel Partners since September 2014.
His hour-long, packed keynote had some valuable tips for founders on the search for funding of their startup. With a clear American perspective on the global tech community, Destin proclaimed that „it’s better not to take money, than to take money from an asshole.“ He acknowledged the fact that founders get turned down a lot by venture capitalists and angel investors but also says that it is the norm. At Accel Partners, out of 1000 first calls or meetings with companies, in average only 15 deals are going through. Fortunately, a „no“ after a certain point doesn’t necessarily mean „no“ forever. Your situation might change quickly, so keep potential investors in the loop and approach them again when you’re able to show some important development regarding your numbers and your product.
Destin expressed his contempt for entrepreneurs who walk into a pitch apparently unprepared and thus gave some specific pitch advice. As a founder, your pitch should be perfectly prepared so that you can deviate effectively but return at any time as well. Don’t get sidetracked for too long and keep an eye on your time management. Understand your audience and know your metrics by heart!
You should preferably train on two shitty funds before meeting the really interesting VCs. In addition, be exciting and memorable! After a few weeks, your meeting partners will only remember a fraction of what you pitched them but they might remember what a good time they had listening to you. This positive memory can be the entrance card to a follow-up meeting.
And finally, in my opinion the most important lesson: Pay-it-forward and don’t be a jerk, as a VC but also as a founder. Being supportive of others is the key for success, not only in business but in life in general. Eventually it will get paid back hundredfold when you are in the need for some help, too.