Questions arising
Startup Secrets community questions:
From
@Daniel Colaianni
: “How can I get in front of investors?” The video emphasizes the importance of strategic networking and relationship building to meet investors. It explains that getting in front of investors is not just about having a compelling business idea but also about leveraging connections, understanding investor interests, and engaging through the right channels.
Key takeaways on meeting investors:
- Build Relationships Early: Start connecting with potential investors before you need the funding to establish trust and rapport. Get creative on how to connect, for example using the channels they use on social media or the venues they frequent IRL.
- Utilize Your Network: Leverage introductions from your network, including mentors, business associates, and other entrepreneurs, to gain access to investors.
- Attend Relevant Events: Participate in industry events, workshops, and seminars like the one at Harvard i-lab to meet investors and learn about their investment philosophy.
🎙 Hear how Michael taught it the lecture, cleaned & woven in
▶ Watch the original lecture
Why is the business model and financial model down the line, after the product?
Question from the audience: “Why do you have the business model and financial model way down the line, ahead of the product? Shouldn’t you have the business model, your fiscal model, and how much people are willing to pay for it ahead of developing the product? Isn’t that part of the ideation and creation?”
Fantastic. Yes, yes, and yes. The point of literally throwing that slide up in handwriting is that it’s totally malleable; you decide when to spend time on each element. All of these elements, the product, the model you take to market, and the business model, need to be part of your initial thinking, even at the most basic level: thinking about packaging and pricing, distribution channels, or the cash requirements of delivering the product. Think about all of them as early as possible.
The business model can turn out to be more important than the technology breakthrough. There’s a multi-billion-dollar company, Red Hat, that didn’t innovate in a product sense; they do nothing other than sell open-source software, but their business model of delivering the value behind open source is so unique it built a multi-billion-dollar company.
The insistence-on-exclusivity and the helpful-but-not-investing VC
Question: “What if they insist on some limited exclusivity?”
Rich, who deals with this all the time: when you’re far enough down the track it’s one thing, but for an early-stage company it’s all about the relationship. I couldn’t say it better. Not only should you say no, but if they’re trying to force something on you, that’s not really the kind of relationship you want. You want a natural fit that feels mutual. You want the option to move forward for valid reasons, together.
Question: “A VC who’s willing to give you time, to meet, and connections within their network, but not willing to invest: will they ever turn into an investment down the line? Or is that someone you just keep on your radar as a good mentor and move on?”
Let me broaden it: when you start talking to VCs, the real question is when do you know they’re seriously going to do something with you versus when are you just meandering, maybe they’ll help you, maybe they won’t? My experience as both an entrepreneur and a VC: if it’s meandering a bit, it’s probably not going to happen. Your probability goes from what was already low, maybe less than five percent, and I’m being generous. Meandering could be spending a couple of months, and to me that’s a long time. Anybody working with me would know in less than two weeks how serious I really am; it would be crystal clear, not guesswork. My general advice: get beyond a month and feel uncertain, and it’s probably not going to happen.
On the specific question, there are a lot of good people who won’t necessarily do the deal but will genuinely help you. Use your common sense to fish that out. I’ve done that a lot, where I’m pretty clear I’m unlikely to do the deal, but I’m going to help.
Startup secret: have a very simple conversation after every meeting with your VC. Ask, “Was this a good meeting, and do you want to move forward or not?” Just qualify it. If you don’t get a really clear sense, kill it, because your greatest cost is the opportunity cost of not spending that time with the next VC and building the next relationship. Far too many entrepreneurs wait too long to qualify whether a VC is interested. If you feel like you’ve been meandering around in the desert for a couple of months, give it up, move on, and find the next one.