Six Things You Should Know Before Meeting with a US Venture Capitalist

It’s great to see 2010 Australian entrepreneur of the year, Khimji Vaghjiani, CEO of Solar-Gem getting some press in Australian Anthill. We worked closely with Solar-Gem and the other state finalists in this year’s G’Day USA Innovation Shoot Out in Silicon Valley. Part of our coaching was to prepare CEOs of these companies on what to expect when they started meeting with American VCs and other investors, who approached them after the Shoot Out. Khimji reveals to Anthill some of our advice in “Six Things You Should Know Before Meeting with a US Venture Capitalist“:

  1. Drive-bys don’t work. In order to raise capital in the US, you have to establish yourself there. VCs like to be close to their investments, and they more often invest in companies that own the IP they are investing in. US VCs often take a board position and expect that board to have the final say on company matters … not take direction from a ‘parent’ company in Australia.
  2. Think global, think BIG. Projecting $10M revenue in Australia is considered a reasonable success metric, but this number will not interest a US VC. In the US, $100M revenue projections are common and 10x returns on investment are expected.
  3. Know your competition. Spend time familiarising yourself with your competition in the US market. If a VC names a competitor that you have not heard of, close your laptop and leave — the meeting is over.
  4. Team. Option 1: You have the best team, proven track-records, no question that your team is the right team to execute the plan. Option 2: You have team gaps, you know it and one of your criteria for selecting your investor will be that you believe they can help you build the team.
  5. Focus, focus, focus. Since Australia is such a small market, a company has to sell broadly across many market sectors in order to be considered successful. In the US, however, this could become a company’s downfall. Large, complex markets (like the US) need focus. Your VC wants to see a laser-sharp market entry strategy that will take the company to the next level (profitability or next investment round) as quickly as possible. Be prepared to give the ‘blue sky’ opportunities, but don’t make this part of your pitch.
  6. Learn from every meeting. There are hundreds of quality VCs in Silicon Valley alone. Every meeting will provide you with invaluable advice and ideas that you can incorporate into your pitch and plan for the next meeting. Ask for feedback, and you’ll be able to improve your pitch with every meeting.

Solar-Gem, a company from New South Wales, has an interesting story. They’re an Australian company seeking US funding to develop business opportunities in India, Africa and the Middle East. (Read more)

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