John: How many VCs should I contact?
There is no rule of thumb to this question however there are a few guidelines you should consider as you begin to prepare to raise capital.
1. It’s never too early to begin sharing your company with investors – VCs like meeting companies under the guise that there is no pressure to make an investment decision in the immediate future.
2. Do your homework – target VCs that you know like your space, stage, and model as your odds of finding a match increase significantly.
3. Network – try to find someone who knows the VC you want to connect with and get an introduction/recommendation.
4. Never give up – VCs make decisions based on all kinds of criteria including things that have nothing to do with your company (e.g., you’re a Saas provider to the telecommunications industry and a VC may turn you down because of a bad experience in another highly regulated or oligopolistic industry). The point is the more folks you talk to the higher the probability you’ll find a connection.
5. Give yourself plenty of time to get the financing done.
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