How to Nail Your First VC Call

Here are some quick tips for your first one-on-ones with investors. Hope it helps!

To be honest, I don’t know how many calls with founders we have had the privilege to do after 3 years of operations at Samaipata. As a tribute to all the entrepreneurs we’ve spoken to and a tool for the ones to come, we would like to share with you our learnings on how to optimally set up a call both from a technical (AKA making the call happen) and an analytical (AKA making it value-adding) perspective. Trust me, it makes sense to think about how to optimise the process. It saves a lot of time, improves the quality of the output exponentially, and reduces anxiety :)

DISCLAIMER: This list of tips is fairly comprehensive, and it might be hard to follow all of them every time — just thought they might be helpful.

How to setup a call: schedule, place and action.

Here are some quick tips that I’ve incorporated to my routine to make the call happen. Let’s start with the call schedule:

• Send a calendar invite. Use that calendar invite to specify the communication channel you’re using and add your user ID.
• Ideally try to save some time after every call as a firewall for potential delays.
• If you use an Excel to register the outcome of your calls, fill in the basic details of the person/company you’re speaking to before the call.
• Do some research to have some background info on the investor — at least the basic details (investment scope, average ticket etc.).
• Some founders are reluctant to speak to certain investors if the company doesn’t meet the fund investment criteria. However, I do think one can always benefit from such conversation — advice, potential synergies etc.

You’re ready for the call to happen, but wait, where will you host it? Here are some quick comments to set up a friendly environment:

• Find a calm, cozy and welcoming place to set up the best environment possible.
• Use cable internet connection (or incredibly fast and infallible WiFi) is a must to avoid any interruption on your side.
• Install a TV or second screen connected to the laptop. Once you try it you become addicted :) It allows you to check different materials/tools during the call and to have a better UX.
• Have a loud and clear sound system. Wearing headphones is also very convenient to avoid the contrary listening to your typing.
• Use a trustworthy conference call software. Yes, I’m sure you once said: ‘can’t believe we’re on 2018 and we still have the same UX than in the 90s’. The phone is an alternative, but is a harder mean to build a genuine interaction.

Last but not least, some quick tips for the call itself and the aftermath:

• Start sharp! Be hyper punctual. For that it is vital to be at least 5 minutes before to the virtual conference room in order to have a setup buffer.
• Measure your time properly. Conciseness is a powerful virtue which allows both parts of the call to ask all the questions they want to.
• Finish on time unless the counterpart is willing to continue and you don’t have anything scheduled for later.
• Send an email to say thanks, to solve the remaining questions that you didn’t solve during the call and to share any additional materials.
• Set up the tasks you need to fulfil and the deadlines.

Going through the call: topic by topic

Here are quick tips regarding the purpose of the questions we ask to founders. Again, this is just a format we use. We hope to get tons of feedback!

Team: As seed investors, beliefs in teams made up 80% of our decision-making. We want to understand if the team’s background, structure, and motivation, makes sense to execute the vision they have in mind.

• We like founders that go through their academic and professional background in 3–4 lines or 2–3 minutes. We need to get a closer understanding of the founders’ profile through their answers to the rest of the questions.
• If there’s more than one founder in the call, we like each one presenting him/herself. Having one person introducing everybody kills the spontaneity, shows lack of power balance and, let’s be clear, is weird!
• We like founders to briefly explain the team’s structure and the different areas each team member covers (e.g. Sales, Marketing, Tech, etc.). Team’s assessment comes later in the analysis.
• We always ask for a “Why Launch”, which is basically the personal link of the founders to the market and to the business (e.g. How founders met, why you launched). Of course, we assume that one of the reasons is that you always wanted to become an entrepreneur, but would be great to dig a bit further ;)

Vision, go-to-market & business model: articulating what you want to be when you grow up (vision), what are the first steps you’re taking to penetrate the market or how have you launched (go-to-market) and what are your monetisation channels (business model).

• We like founders to be able to define their vision in one single sentence.
• When defining the vision, using a referent startup is helpful. However, it kills a bit of the authenticity of your usp. I would rather come up with a simple self-explanatory sentence.
• Following the vision, you may be asked to define crystal clear what are the current pains of your market of operations and how do you want to solve them. This point may allow you to show a great degree of knowledge based on the feedback gathered from stakeholders. Dig deeper into the current market trends or into the underlying market structure instead of only looking at the usual suspects (e.g. people want to order on-demand).
• Vision has a lot to do with ambition. Don’t be scared to think too big. We understand venture capital as an industry driven by human beings striving to change the world for better. That requires big doses of motivation!
• As said before, don’t confuse your short term go-to-market (first approach to the market) with your end vision. What you’re doing today is just one of the keys to unlock the full potential of your business.
• Go-to-market says a lot of your speed of execution, as we ask you to share with us all the things you’ve done on your first months since you decided to become an entrepreneur (e.g. acquisition channels you’ve tested, processes and play-books implemented, etc.). Basically, we’re testing your ability to identify your segment and how efficient have you been at approaching it.
• We like founders to be able to define their business model crystal clear. Make sure we have understood it (insist if you’re not sure as sometimes we may have drawn the wrong conclusions).
• Careful with pitching what we call an “spaguetti model”. This is an infinite set of revenue streams of which only few of them actually make sense or account for a significant share — often they do not even exist as of now. A multiple revenue stream pitch may imply: lack of focus, unawareness of the complexity of building each stream and lack of trust on your core revenue stream.

Why now, market & competitors: understanding the market is our first duty as investors. Our job is holistic per se, and we spend hours digging into the model we want to invest in to build our investment thesis. Here are some quick notes:

• Time-to-market is crucial when launching a business. When we ask ‘why do you think now is the right moment to launch your business’ we’re testing the founders’ ability to detect market tail & front winds and a general awareness of the industry’s status quo.
• We like founders to be able to analyse market trends and structural shifts other than ‘we’re in the age of the collaborative economy’ or ‘people are using smartphones for all their needs’. Generalist market patterns may be true, but do not show why your value proposition will bring disruption to the industry.
• Finding accurate market info is hard, and so is calculating market sizes. However we know founders can have brief figures in mind. These may come from some reports you can find online or from bottom up or top down high level estimations. Essentially, we want to understand how concentrated is the market from both the supply and the demand side, and what’s the value of your total potential market.
• Doing a competitor benchmark is crucial. Here I would like to be 100% clear. We like founders to be:

a) Sincere: not mentioning key competitors shows either the lack of a complete benchmark, or the willingness to hide players. Also, the fact that a player doesn’t have an identical value proposition to yours, doesn’t mean is not a competitor.

b) Positive/Open to learn: listening to founders criticising other players makes us very sad. While it’s OK to underline some of the key differences in the business model of your competitors, we like founders that remain respectful and learn from others.

c) Realistic: if you’re renting a couple of rooms in the magnificent Costa Brava in Spain, yes, Airbnb is one of your competitors, but it might be more accurate to mention those small renters of your same little village by the coast. Make clear that some competitors are local and might be more relevant now vs. the big players.

Unit Economics: First and foremost, relax! We’re not revenue-driven, and we have invested in pre-launch businesses. However, as far as you have 1 hour of operations, you already have some data that’s interesting to check.

• Know your company high-level KPIs better than your name. Assuming we’re speaking with the CEO of the business, this should be a no-brainer right? Needing to check an excel to say out loud your last year’s revenue or your current CAC, is not a good sign.
• Have your top line P&L crystal clear.
• User retention and engagement, are crucial KPIs in most business models. Get familiarised with cohort analysis (you can use our free cohort template), and give importance to usage data.

Cap table, timing & use of funds: After all, we’re getting married! In this section we want to understand what’s the current capital structure (specially how diluted are the cofounders), when are you closing the round and how will you invest the money.

• Have a clear structure of the founders’ equity and the ESOPs estimated in mind.
• If the equity held by investors is atomised, make sure to have confort mechanisms in place (e.g. syndicate), and explain them.
• We like CEOs to have ownership of the fundraising procedure. We have nothing agains intermediaries, but as seed investors we invest in founders and we need to speak to them all along the fundraising.
• The timing you have in mind to close the round speaks for your speed of execution. We like the CEO to be a chaser, willing to close the round ASAP and go back to day to day operations rapidly.
• Having a minimum view on resources allocation (split between marketing, tech, and hirings, etc) before hand is key to make sure interests and vision are aligned. Have your business plan ready, and explain carefully how will you distribute the funds.

Bonus ;)

• Avoid saying: “this question is answered on the deck I shared with you”. After all, we’re humans, we read a lot and we forget things, but more importantly, we like to hear the info from you ;)

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‍At Samaipata, we are always looking for ways to improve. Do not hesitate to send us your thoughts. We strive to partner with early-stage founders and to support them in taking their business to the next level. Check out more ways in which we can help here or for all our other content here‍

‍And as always, if you’re a European digital business founder looking for Seed funding, please send us your deck here or subscribe to our Quarterly updates here.