Blume Ventures, Accel, Matrix partners, Nexus partners and Bessemer Venture partners all had their CEO meetings and invited between 100 and 200 portfolio company CEO’s, angel investors, entrepreneurs and other venture investors to the meeting. Most of these meetings were held in Bangalore, (Blume did others in Mumbai and Delhi, and BVP in Mumbai). The format of the meetings was fairly similar – cocktails, an introduction to the fund, a few select portfolio company CEO’s either in a panel or individually on stage talking about their company or industry trends, and finally dinner and networking.
Of the 200+ people in each event, about 120 are the usual suspects ( these numbers are my own guesstimate, not very accurate, but in the ballpark). They include some up-and-coming entrepreneurs, media folks, wallflowers and other luminaries.
These events are both a way for folks to catch up and network, and also for the fund to showcase potential CEO’s to later stage investors for follow on rounds.
The most interesting are the 50-60 folks who are “new entrants” – they are wannabe entrepreneurs, “friends of the venture firm” – typically large company executives who they are trying to either get on the advisory list of their invested companies, or keep the close so they can be the first source of funding when the executives decide to “start something”.
Meet these folks and you quickly get a sense for the firms “proprietary dealflow”. While most of them may not like to acknowledge it, regardless of their “sector neutral” stance, their biases show very clearly.
Although most of the VC’s claim to dig “wide and far” to source deals, and spend a lot of time on planes, they rarely go outside their comfort zone. That’s on an individual basis. I dont think its because they dont have the intent. They also dont have the time to make and maintain new relationships.
Why does this matter for you the entrepreneur?
Say you are an entrepreneur looking for the next round of investment after your initial seed round. The first thing you have to realize is most of these firms prefer being “the first institutional check” into the company.
So remember what I mentioned earlier – Dig your well before you are thirsty.
If you are looking for a round of funding in 6 months, its ideal to start creating a top 5 list of individuals in each firm (not VC firms, but individuals within the firm) who will be on your target list. Then meet and network with their executive list – those 50+ folks I mentioned before. They are the most likely to perform the due diligence on your company before the VC invests.
Each VC firm has their top 50 folks, so technically in India, there are not more than 500 of these folks (after accounting for the fact that some of them overlap VC firms). If you take into account your specific sector and area, I suspect there are not more than 10 people you will have to meet.
These are the taste makers. They are not entrepreneurs, but the ones who will have a strong “No” on deals. Their yes may not translate into an investment, but their no will surely kill it.
Have you attended any of these? What other observations did you derive from these events?