6 Common Roadblocks to a Productive Introductory Conversation

April 25, 2012

As I’ve previously written, I am very fortunate that my role as an Associate at OpenView allows me to speak with some incredible entrepreneurs and hear about some really amazing businesses.  Unfortunately, while I go into every introductory call with a positive attitude and a desire to learn, that doesn’t always happen. Below, I highlight some roadblocks that can prevent the conversation from being as mutually productive as possible.

 

  • Not enough time for the call.  I am far too guilty of this myself. I often try to cram more meetings/calls into a fixed time period. Half an hour may not be enough time to discuss OpenView’s approach, how we look to add value to expansion-stage businesses, AND come away with a good understanding of what makes the potential company a compelling investment opportunity. My advice is to try and give yourself some time on the back-end of a call in case the conversation is going well and you need to spillover. Or, simply set up the call for 45 minutes to an hour. If it is clear early on in the conversation that there is not a mutual fit, you can always ended the call prematurely.
  • Do your homework. Again, this goes both ways for the entrepreneur and the investor.  Spend some time on the company’s website to pick up an understanding of what they are doing so you can spend your time on the phone together more wisely, asking the right questions to each other.
  • Don’t assume. We’ve all heard this one before. Don’t make the common mistake of assuming the person on the other end of the line knows what you are talking about. Per the previous point, hopefully everyone has done their homework, but by no means does that make the VC an expert on the potential portfolio company and visa-versa. Make the conversation comfortable and engaging by allowing each other to ask questions of clarification or request specific examples.
  • Playing games and/or not being forthcoming. Trickery and games won’t move the conversation in the right direction. Each party should do their best to answer questions as honestly and openly as possible. That doesn’t mean that you have to tell a VC all of your trade secrets in conversation #1, but it is important to give clear answers to questions to help them assess whether or not there is a good fit. A common question is regarding revenue and growth – many CEOs just aren’t comfortable divulging that information and that is OK! A quick way around this is to talk in the form of ranges for the initial call – i.e., “we’ll just about double this year to $4 or $5 million in revenue.” This directional feedback should be enough for the VC to assess whether you fit their criteria while not holding you to specific numbers right out of the gate. If you want to keep the conversation going, however, I would be prepared to share more-detailed information soon after that first conversation.
  • Give just enough information. I find that the most productive conversations are ones where CEOs spend less time on the history of the business, but rather focus on what is going on today. Similarly, while a technical overview is helpful, you may lose your audience by diving too deep in the weeds on the technology. I’d focus on how your technology is unique against your competitors’ and how your customers are using it. That helps answer a lot of the fundamental questions that a VC may have.
  • Have a two-sided conversation. I like to hear myself talk – I know that. But I make it a point to try to limit my OpenView pitch to a few minutes so that I can spend more time answering questions about our firm and approach. The same should go for the CEO – far too many VC pitches are one-sided, dropping a lot of information, buzzwords, acronyms, etc. into a long-winded appeal for capital, only coming up for air once they’ve finished. Pause every now and then to engage your listener to make sure he or she is following the story and that you are driving home the points that you truly care about.

Again, I’m sure I missed plenty of other items that could halt a highly-productive conversation, but these are a few of the more common ones that I run into (and that I’m guilty of myself). I think if we can make a concerted effort to focus on understanding the way we approach these introductory conversations, we can break through these roadblocks and have very valuable, productive, and fun discussions that move us all towards finding the right partners much more quickly.

Ricky Pelletier

Partner

<strong>Ricky Pelletier</strong> focuses on identifying and analyzing various market and investment opportunities. As a Partner, he works with other members of the OpenView investment team to structure and conduct diligence on new investments.