Hello and welcome to early stage, I'm Natasha Mascarenhas. And as Jordan mentioned, we are going to be talking about how founders can think like a VC. I'm really excited about this topic because I feel like the best VCs and the best founders have a lot in similarity. They are good at doing due diligence. They are good at finding signal through noise.
And they're good at
managing the ups and the downs that it takes to be behind the scenes building the company. To get us through this topic. We have Norwest Venture Partners. Lisa Wu joining us all the way from Germany. Lisa, super great to have you here. Great to be here. We're going to have Lisa walk us through a really detailed presentation where she'll share her top tips. But in the meantime, and throughout, I encourage everyone paying attention to send in their questions. I will filter them over to Lisa towards the end of the presentation. Feel free to include your name, your company name and what your question is, and we will try to get as many answered as possible. But until then, Lisa, I will hand over the mic to you and hear to hear all about how founders can think like a VC.
Thanks so much, Natasha. Hi, everyone. It's very nice to be here with you today. I've been in venture for over 10 years and have heard 1000s and 1000s of pitches. My goal today is to help demystify the fundraising process to help you understand how VCs evaluate your pitch and your business so you can do your fundraise. I wanted to this off by saying that I'll be sharing insights and tactics and how to create an engaging presentation. That said I I'll caveat that this may not be the most exciting presentation that you've ever seen, but I hope the information will be useful for you to create your own. So first, I want to talk about how to get a meeting with a VC. In the years that I've been in Niger, I haven't seen a cold email get funded. This doesn't mean that it doesn't happen, but the likelihood is much, much lower. Many VCs including myself are swamped with emails and strapped with time. So we looked her network to help filter leads, I found that the best way to meet a VC is to network your way to warm introduction. Thankfully though, there are other ways to get to know a VC, for example, one great way is to engage them online. Many VCs are active on Twitter or they write blogs, find people in venture who are tweeting or writing about the area that you are active in and approach them through a thoughtful comment. I also want to note that it's more important for the right people to say yes than for everybody to say yes, every VC has a sweet spot in terms of the type of company the stage of development, the size of the total commitment needed, etc. So do your research and be strategic, find the right VC that is passionate about your space. Another insider tip is check to see if an investor is new to the firm. If so they're probably very focused on building their portfolio. This means that they're likely taking more meetings than other investors at the firm. And if you're lucky, they're also specialized in your category. In the following slides, I'll be discussing what makes a good pitch. I'll start with some general guidance and then move into content specific guidance. I want to emphasize that as the founder and CEO, you have three main jobs, setting and selling the big vision fund raising capital and hiring the management team. All three of these jobs require selling and your ability to do this to sell is sensed during the pitch meeting. So learn to sell, which means learn the ability to tell a compelling story about your company that makes people want to buy in. When creating your pitch deck, remember that you want to tell an engaging story. It's not a data dump. Think of the pitch deck as a story told in a sequence of slides. I often recommend having the headline and each page read as a continuous piece of prose it's stitched back together. Also keep your main deck short 10 to 12 slides, maybe 15. If you can't get the audience excited in 12 slides, you definitely won't get them excited in 40 slides. clearly communicate the value proposition early. If I don't understand what you're doing in the first 10 minutes, then I will wonder how you will sell your vision to customers to employees and to other investors to get them to buy in. This is something that I quite like which is the eyebrow test. And this means with each slide make sure the eyebrows go like this green face. Wow. Tell me more. Next slide fibers up Wow, tell me more. Next slide. If they're furrowing, like this blue face or skeptical like this yellow face, it means that your slide needs to be reworked. Your goal is to allow the investor With up with a clear and engaging meeting to get to a second meeting. Sometimes founders like to tell jokes as a way to break the ice or connect with the investor. steer away from rehearse jokes. People have different senses of humor, humorous, and they often fall flat just just don't do it. And I also want to highlight that it's important to be present during the meeting and connect with your investors, not your PowerPoint slides. Avoid reading a speech or sticking stubbornly to a script. So make eye contact, pay attention to your body language and engage with each other.
And as the entrepreneur, it's your responsibility to lead the conversation, but get ready for questions. Many investors will hijack your presentation and bombard you with questions. See it as an opportunity to engage in show off the parts of your business that serves their interest. A great presentation is interactive with investors ask questions and founders weave in key points in their replies. And because of these questions, be prepared to go out of order. Have a short direct presentation and know your presentation well enough to be able to present it in a random order and show that you can be flexible. Something I also want to share is you do want to be aware about your reaction to questions and interruptions during the pitch because that can also make or break a deal. investors want to see that you're flexible and a passionate entrepreneur, so do your best to be curious and accommodate the investors questions. venture capital is all about calculated risks in each VC has their preference and how to weight the risks to assess whether a business will scale or whether it will plateau. The following set of slides highlight the risk areas that are important to cover in your pitch deck. I found that the largest determinant of a startup success is the CEO. starting a business is super tough, and I'm looking to understand why you as the founder and CEO are passionate to wake up and solve this problem every single day. Age matters less to us than communicating why you have founder market fit potential. At Norwest. We've back to fresh graduates to seasoned executives and the thread that connects them is understanding what unique insights they had that gave them an unfair advantage to solve the problem. I found that the best founders have experienced directly or indirectly, the pain point they're solving and have very deep empathy for the customer as a result, so share why you are the right person to solve this problem. But keep that story to five minutes. Sometimes founders spend 15 minutes on their history, which just does not demonstrate self awareness and good judgment, which are two attributes we look for in founders. Investors are invested in both the idea and the team that executes it. If you've hired team members emphasize the strength of your team. I'm ultimately trying to understand if you've demonstrated the ability to recruit a players and make sure you are aligned as a team and in front of investors. This means don't fight or squabble with your team, you know, keep that out of the pitch meeting, because ultimately, this can erode our conviction that the team has a solid foundation or a healthy dynamic. Another thing we look for is a very large and growing market. Lots of companies get to 15 to 20 million, but they have difficulty scaling from 20 to 100 million plus, and this ultimately becomes a market size question. So showcase a large market on the right side of history. Another risk we look at is product risk. This means Why will the product actually work? You know, so if possible, show early data points and product market fit. This can be incredible quotes from early customers, NPS seats et CIE SAT scores etc. An idea is one thing but getting the customer to pay for the good or service is another. Another risk we evaluate is how will you efficiently acquire customers over time? For example, if you're a consumer company, paid marketing on Facebook gets increasingly expensive as you scale. Do you have an angle to offset this? Are you building a brand that can drive free word of mouth. And beyond focusing on a large and growing market, the best founders have a very strong grasp on the competitive landscape. You know, sometimes I hear founders say there's no competition. And usually this creates skepticism as this is oftentimes not the case. Even Greenfield opportunities have some competitors. So pointing to interact competitors or substitutes will demonstrate a deeper understanding of the market and suggesting that none exist otherwise. And no you your metrics. Not knowing basic KPIs is an easy way to reduce credibility right out of the gate. We as investors want to know that you are living and breathing the business, figure out the most important numbers of your business and have those memorized. If you have an income statement, don't be overly conservative about how big your business can get over time. VCs will haircut, whatever numbers you provide anyways. Another way we think about is financing an exit risk. This means how much money will you need to raise to get to the finish line? It also means Okay, so you're building a company with great customers and healthy revenue. But Will anyone actually care? Who will actually buy it? Or can it go public as a standalone business one day.
And this is the last slide. And what I just want to share here is, you know, in the end, a crucial ingredient of a successful fundraiser is appearing confident that your business will grow and be successful. Whether or not this firm will invest. It's when investors feel that they are missing the train is when they really want to get on the train. Conversely, if your demeanor feels desperate, and it will just be virtually impossible for you to raise money. It's like dating. No one wants to date someone who is desperate. They want to date someone who has options. Ultimately, fundraising is a skill, you get better at pitching by pitching. It's one of those things where practice makes perfect. Even if a VC passes on your company. Now remember that a good first impression could lead to introductions to advice and maybe even financings down the road. So I hope these insights and tactics are useful. And now I'd love to open it up to questions.
Thanks so much, Lisa. That was great. And I completely agree with the dating metaphor. And similarly, another one of my favorites is your early stage investor is like the marriage but you can't divorce as easily. No, but I really appreciate it. And yeah, we're opening it up to questions. We already have a few filtering in some more context on Lisa, as people are putting in these questions is that she focuses on C to late stage companies. She has an interest in consumer internet, digital commerce, and next gen marketplaces. And her portfolio definitely includes companies you already know, such as calm ritual Plaid and open door. So those are some backgrounders. Lisa, do I miss anything before I hop into questions that people should? Okay. Awesome. So question number one, I think the question of the month is, are you back to taking in person pictures? Or is it all virtual for you?
So we are back to take an in person purchase. And so we do both now, I think kind of what we see in individuals journeys, we want to meet the person where they are. And so we're able to do it, either zoom, or we can also meet in person. Okay,
God, do you anticipate that having any change on your geographic interest? Like are you starting to feel like it's just easier to do it in person? Or do you view yourself at least doing the hybrid?
Is it easier to meet in person that,
I guess like kind of this conversation on like, does the founder who meets in person versus remote have a more competitive edge or even less competitive edge in your view as the world reopens?
So you know, I think in the end, just like I mentioned in the presentation, that it is around a connection, right? And the world is, especially the fundraising landscape is getting increasingly competitive. And so oftentimes, just an in person interaction creates can create a stronger connection. That said, deals are getting funded without meeting too. And so, so they're happening both ways.
Totally awesome. Kind of On a similar note, this is all I'll start with the questions around deals and how they get done. So one person asked if a deal doesn't work out, but you want to keep the relationship warm for the future. What type of communication? What kind of communication and relationship steps should we as a founder take?
So I am, I love getting put sometimes I'll get asked to be put on just updates that they share with investors or people that they've liked and met across the way. So if you are creating a monthly email to just update folks in, feel free to add folks that you feel a strong connection with to update them on the business. And so I, I love to hear founders, I think if I'm building relationships, probably like a quarterly checking. And also, I think we also spend a lot of time just relationship managing and reaching out to founders to to see how their business is also progressing.
Okay, awesome. Kind of like founder newsletters. Yeah. Cool. And then similarly, with the warm intro, I was curious if you prefer creative networking, or if it's as simple as dming on Twitter, maybe if you could walk through anecdotes of how some founders have gotten your attention in the past that would be helpful.
Yeah. So I think it's, um, it's both I found that the best way to get my attention is if a founder that I'm already working with and I trust sends me an introduction, right. And so that's like, as close as you get to kind of like the warm introduction. But that said, finding anybody in my network is oriented VCs network just to get, just to get you above on the email inbox, it's not that folks don't want to pay attention, it's just that we're inundated with so much. And so it just helps elevate you there. But I, you know, we really love those that are creative and have persistence, because honestly, those are two attributes that lead to success over time for our founder. And so I mentioned earlier that, you know, a lot of VCs today are on Twitter and on social media, and they, and that is a great place to just engage in a conversation with them and get their attention and having a thoughtful exchange. And so that's also just a great avenue to connect with folks
thought it. And I mean, this is kind of another follow up, which is, is it how relevant it is for you to have testimonials from other investors, when someone's pitching you, or it kind of just be the company or another, another person you respect doesn't have to be from a specific kind of person.
You know, in the end, it's about trust, right? And so if it comes from someone I already trust, it kind of elevates you. But if not, I still give attention as well, too, right? It's just that then you have to build the trust from a bit of a more of a cold start with the founder. And so. So it's like, the closer that the closer the mutual connection is to the actual investor, the easier the investor will pay attention to it. Okay, got it. So as you know, I've mentioned cold emails to steer that, even though they haven't been funded before, it doesn't mean that they, they don't, right, and it's more than if you're going to write a call to meals, I also get a lot of cold emails. And sometimes they just look like cut and paste templates. And I can tell that right? And so a cut and paste templates makes it easy for someone to just ignore it. And so if you're going to write an email, just, you know, do your research on the investor, and also just share why you think you'd be a good fit for that investor, as opposed to just blasting and just trying to get anyone to say yes,
yeah, if there was like a percent, I'll put you on the spot. There was like a percent of cold emails you say, you open, what would that percent look like?
I usually read in skim all my emails, even the cold ones that come in, because as investor, you just don't want to miss one right? That may not come in through. Right, like just a cold email. And so I personally usually skim at least everything right? And I'm trying to understand the authenticity and the genuineness and what's going on in the business. And so so for me, I skim them all.
Okay, awesome. Awesome. One more question on pitch. Someone's asking, how do you look at a pitch for a company that could be competitive couldn't become competitive with an existing portfolio company? I know in your portfolio companies Plaid is one and there's so many Plaid for EQT startups out there. So I wonder if you've experienced this or kind of yet your advice on dealing with potential competition between investments?
Yeah, so I am, I don't think we would really put a Norwest invest in a company that's directly competitive with one of our portfolio companies largely because when you become part of the Northwest family, we want to be able to put all our resources behind you and align in terms of helping you to execute. And so if it's directly competitive, it will probably cause more pause internally, if it's tangentially competitive, because in some industries, people have just, you know, such a large vision. And so because that large division strategy, division can overlap over time, what we will typically do is we'll ask what we like to be very transparent and how we conduct ourselves. And we'll ask our existing portfolio if you know what they think and feel about this, right. And we wouldn't just make an investment without checking to see how that might land on our existing portfolio companies.
Got it? Got it. So it could be like, you're not going to back only one like FinTech services company.
Right. And I think also, you know, every investor has a bit of a different style. But for me, I sense that a firm is might be slightly competitive with our portfolio company, I'll also be transparent and disclose that upfront, because I want it's, you know, it's better for everybody to know than rather you pitch and like, disclose a whole bunch of stuff, and then realize that we're an investor. So we try to just conduct ourselves with just integrity and transparency. Awesome.
On metrics, we have a couple of those questions coming in. Are there any specific growth metrics that you look for when evaluating consumer internet companies?
So you know, there's like a whole host of metrics that we can look at in first I'd caveat and say that earlier on, if you're raising like a seed series, a even Series B, these days, the storytelling is actually more important than the metrics underneath. As you get later on. I think that's when we start looking about the metrics and seeing how this business how efficiently this business is running and can they become profitable in day or or are those things that create just a more sustainable durable business? And so, so yes, I'd say yeah, we look at everything from just unit economics. We drill a lot into that we look at cohort analysis, we look at just customer if it's a consumer business. Customer love and just what NPS might be or just organic word of mouth. And so there's just a variety of things we tried to, to understand to just see what's underneath the hood.
Got it? And in terms of the actual pitch, and let's say the founder does find their their magic metrics to share with you. Do you prefer to be like, I guess in terms of like, slide orientation in the pitch deck? How early? Would you say metrics should be up there? And should it be meeting before that, that that founder, bio, or should it be kind of toward the end? Any, any, like, kind of standards around that?
Yeah, I'd say. Often, oftentimes, what I've seen land well, is that if you have compelling metrics, and you're a later stage company to just have those upfront, because as investors, we're a bit like truffle pigs, you know, like, we're searching for companies all the time trying to piece together what the metrics are underneath the hood. And so if you know, if we're meeting, if you're at a late stage, we might already know who you are, there's, and so for you to just wow, us, it's kind of like that, wow, like, hey, all these metrics are tracking, then you got me hooked, and I'm interested to hear how the rest of the story is going to unfold. For earlier stage companies, I think the storytelling is much more important, because he's really just trying to share your vision and captivate us with that storytelling around the vision. And so I always encourage founders to, you know, take the time to, to focus on the vision and the problem and why you and, and, and start from their thought stage. And in the early stage, like, how do you feel about unsolicited pitch decks?
Like kind of just getting one in your cold email or getting a link in your, in your Twitter, DMS? Is that a no, no
Is
that like a, it's fine, I might click if it's interesting.
I personally love it. Because I'll give you our two perspectives on this. I love it, because I can quickly flip through the deck and generally form an opinion on it. And I think I've read some stat recently that is that investors really spend it was like two minutes and 47 seconds per deck, right. So it's like, an easy way for me to in that short amount of time, just get a calibration the business to decide whether to move forward. As the founder, I probably tell you don't do that. Because if you're sending me the pitch deck, I'm quickly screaming there, right. And then I'm making a decision of whether it makes sense to meet but your goal is really just to try to get the meeting with me to tell the story and let that unfold. And so, so like enough of it, like a blurb to tease us to want to continue to engage is great. But if it possible, I would suggest a late pullback, the pitch deck, even though I love to receive it in advance.
Okay, got it. I appreciate the transparency, because it's probably easier for them to just link away.
Do you also, you know, when you link away, you know, also dex could share too, right? And so I think you just want to be mindful of that. If you're posting something out there into into the internet that Are you okay, for this being shared, too. Right?
Right. It kind of goes along with that conflict of interest and potential competitive pensions, like if you start sending it to anyone. And I mean, similarly, the idea of a, the idea of requiring a deck is is something that I think comes up time and time again, like are you always team deck or other situations? For example, one question was for a series A, do you require a deck? Are you cool with? Or do you need kind of like the full business plan forecasts all of the information from the get go.
So everything shipped in these days, and because there's so much capital out there, and it's much more competitive. Sometimes if I'm chasing a really hot company, I actually prefer that they don't have a deck, they haven't created one yet. Because once you have a deck, that means you can go and take it out to a bunch of other investors too. Right? And so, so it's helpful to structure the conversation and to storyteller around it. And I think I like a deck more so than not unless it's in a competitive situation. And I'm trying to just, you know, trying to close the deal, that I actually prefer just being an open dialogue.
Okay, now, I'm curious, though, I guess, has there been any recent founders that have, you don't name names, but any anecdotes of people who have successfully Chuck kind of just met with you and pitched you? Like, is there like, printouts? What's the, what's kind of like that
experience they have, there's, to me, as well as to my team and also to the partnership is that if we know that there's just it's just something that we want to move in, generally, we like it, other firms are gonna like it too. We just have them come in and we just prepare in turn, we just prepare our team internally to let them know that there's no deck here. And so it's just them to really just tell the story to us. And, and it's, it's worked and we wanted to move on those deals too.
Okay, very cool. So open the script a little bit. One listener is asking what are the top things as an investor, you hate parent or some things that really repel you from making the investment
It's kind of, you know, I, when I went through this presentation, I mentioned these different categories of risk from just the market to the team to the business models to the competition. And each of those is each of those things I'm trying to hear, right? Like, for instance, like a large market on the right side of history, that's something that we think about a lot at every stage, right? Is that are you faced? Are you going to have tailwinds? That's going to help you create more of an exponential curve? Or are you going to face a lot of market headwinds? That's going to make it very difficult to scale. So I think on each of those points, there's just something that makes us pause and just, you know, sit back more as opposed to lean in and say, tell us more. Yeah, I
mean, I kind of was even thinking from then you said during the presentation that stood out to me, which is a pet peeve of mine, which was like, when people said that they don't have competitors, because competitors is usually a good sign. And I think, like, I guess I'm wondering, like, if you think the pandemic has made founders more transparent about that kind of stuff, or, or less transparent around competition? Yeah, around like, you know, the fact that there are 30 clubhouse clones being built, or 30 virtual HQ is being built, I think that's always kind of like a funny reality of just how crazy it is. But in your in your serious pitch meetings where the stakes are high, if you find founders mostly being pretty comfortable translating, hey, okay, we have this venture backed competitor.
Yeah, I would say generally, when we ask them, either able, if they don't name it, we'll name who we think is a competitor to just to get how they think about it. Right? What might their strategic advantage might be? But we don't want them to name like all 50 competitors out there, right? It's really just a question like a large part of venture is like, we ask questions, and, and it's kind of our gut that tells us whether there's like, you know, your answer is onpoint or not. And, and so when we ask that question, it's really just, you know, named the two or three that like, are out there as an example, and really just showcase that you understand this market better than anyone else. Because when you're an entrepreneur, and you're creating a business, you're really, you're really there to kind of like make magic happen, right? Like you're you're kind of charting into unknown territory. And so we need to know that you're able to trust your intuition with all those different signals out there to understand how to navigate your ship forward and execute into a category leader, adventure, we're really kind of looking for category leadership, and it takes a certain kind of precision to be able to understand the nuances of the market to continue to refine your strategy and stay ahead of the curve.
Awesome. Yeah, it
goes with what you were saying about storytelling. And I think one question that I get a ton is how transparent founders should be with VCs. When when doing their initial pitch, or as one person asked, like, should they be modifying reality to make it look a little bit more appealing? I know, that may be kind of a black and white question like, Don't lie. But maybe where would you suggest if you were a founder drawing the line between being transparent and being maybe too transparent, and potentially, you know, a little too hard on yourself when you're pitching your company?
I think that, for me, transparency is always a good thing. But it doesn't mean that you can't be transparent and ambitious at the same time, right? Like that. That is the element that connects to folks to is just like knowing knowing what you know, knowing what you don't know. And being honest about that. Because as venture investors or you know, when I'm in a pitch, and I'm trying to decide whether it makes sense to invest in a company, I'm also trying to gauge what is it like to work with this founder, right? And are they like, what is this relationship going to be like? Are we going to be ones that we can be vulnerable with one another and, and share what is happening? Not so well, so that we can team up together and work and figure out how to solve that problem. And so I'd say that I tend to err on more transparency than less, but there's always a way to, to frame things so that it is presented in the best way as you're being transparent, while also showcasing your ambition and your confidence. Okay, great.
I want to move us to I guess, a more macro conversation on you know, not just speaking on behalf of Norwest. But just venture in general some boundaries are just asking questions on how to handle different advice as one person said, How do you deal with conflicting advice from different funds? I had one VC tell me that an exit strategy is a red flag and other one said having no exit strategy is a red flag. So how should founders really balance and cater to all these different expectations and opinions?
So that is, ultimately what comes down to like intuition and judgment of the founder, because you know, as probably one of the most important qualities we look for in a founder is good judgment. And sometimes I get asked, What does good judgment mean? And to me that means that given all the decisions you can make at any one point, what is that one decision that is Better than all the other alternatives. And so as a founder, you're going to be getting lots of information, right? Like, if it was clear how to build the next unicorn, deca corn, then there would be just, you know, a lot more successes there, but it's not. And so. So I'd say it's about kind of understanding the patterns, right, like being open up there, getting all the feedback from investors and understanding the patterns, and then trusting your intuition in order to make that good decision of how to drive your business forward. So I think you also know, you also want to find an investor that resonates with you that you guys can align and what the path forward is, and that vision, right, because if you are thinking one thing, and that investors can be advice, that doesn't, just doesn't feel right to your gut, you're going to have a lot of issues on the board, just feeling supported and aligned to where you want to drive the business. And so I'd say, you know, be open and curious to hear what the feedback is from investors and then synthesize right and and figure out what actually makes sense in order to make that good, good judgment and decision for your business.
Great. Yeah, I think synthesis is another one of those difficult things to do. One person asked, What would you do if a VC does not really provide a timeline of their internal due diligence process? And you're suddenly in a conversation with half a dozen investors and need to figure out what to prioritize? Who to move forward with and how to really like, you know, figure out what's next? Is there a kind of a rule of thumb you'd recommend?
So I think that your job as the CEO and founder is to manage the process, right. And like I said, earlier, you know, VCs, were kind of like lemons, you kind of like, follow where other VCs go to. And so, so I really like when a CEO comes in and says, Hey, you know, here's where I am in the process. I'm driving towards decisions here, and making a decision here, right, because it creates a very clear timeline for folks to follow through with. And so yeah, that's what I said there is that if a VC is is just dragging their feet, that probably means something, I just find that in today's world, there's just no time to drag your feet. Like, if you want to move on something, you have to move really quickly, deals are getting done in 24 hours, sometimes even less, which is like a phone call. And so that's probably just not a good sign that it's gonna work out with that investor, or you can just go back to them and tell them, Hey, I'm getting a lot of other interest. Just let me know where you're where you're at. And they'll let you know pretty quickly where they're at You got it.
On kind of the opposite side of the spectrum, we have one founder, who's mentioned that their runway is short, and a VC with questionable me to ask background wants to invest. They're asking, should I take the money? Or are there steps I can take to protect the company and accept the money? Maybe I can broaden the question out a little bit and ask you, what happens if you're desperate for money? And you have someone who's interested, but you don't align with their past? Or their ethos? Like, should you take it?
Oh, that's like, so hard. And it's such a complex question to answer. But generally, I'd say that I like to view that the I generally like to view that the world is abundant, and that there is just so much capital out there. And there are a ton of ambassadors, right? And if you are willing to make that hustle in order to find that one investor that that does believe in what you're building, and it's just, it just might make you feel better in terms of executing the business. And so it's like a marriage like, do you want to marry somebody who doesn't have the same values as you? Probably not? It might cause some problems over time. So that's generally my stance on that. Yeah, no,
I think that's fair advice. And I think especially with like diverse entrepreneurs, who maybe are struggling to access capital, I think it's important for them to hear that it's a different ballgame. A couple last questions in our in our six minutes here. And everyone, thank you for sending in such great ones. And interesting ones. Hopefully, this is fun for everyone. Make sure to get your last ones and because I have a couple to get through. All right. Alright. So one question is, if you have thoughts on a solo solo founder with a product release, and a small internal team, maybe broadly, what are your thoughts on backing solo founders? Are you comfortable with that? Um, do you have you have you done it?
Yeah, I'm comfortable, and I have done it. And so yeah, that's not a problem at all. I think if anything, if you're going to have a co founder, what I look for is complementary skill sets. I wouldn't start a company with somebody who has the same skill sets, it's you that also will potentially create issues over time and so more so if you're going to found a company with somebody else have complementary skill sets.
Got it. And I'm guessing same thing you said that you guys back first time founders, Would you say that's like a lot of your investment these days or Are you more comfortable with second term founders?
Yeah, I think a lot of my investments are first time founders. But their mix, you know, I think when you're in venture for a while, then you have founders that exit, and then they want to go start a company again. And so, so it's kind of a mix of both first time repeat founders. Okay, got it.
I want to circle back to a question two questions ago, about the, you know, how to understand the person who you are taking money from, who's going to be getting equity in your company and having a long term relationship with you. And I wanted to ask for some advice on how founders can do due diligence on their VCs. What's the best way for a founder once they know and investors interested to kind of flip the script and start asking venture capitalists the hard questions? Yeah, I guess I'm really curious about your take on that.
I think that one of the best things you can do is to friend channels, as well as back channels, back channels tend to be more valuable of founders that they have worked with those that not have only done well, because oftentimes a venture investor will share the founders that have performed well in their portfolio, right. But what is more important is to understand what about the companies that haven't performed? Well, how has that investors showed up, or not showing up? And so those ruptured references tend to tell you more about what an investor might be like, during the tough times when you're scaling your business.
That's a great idea. I think I've always never done it. But do you find that founders are pretty transparent with each other? When you ask them to talk about their investor, I feel like there's maybe a little bit of the perspective that they're never going to talk bad about, someone was aboard at their company, but I guess, maybe I'm wrong.
I think it's all about the trust, you can build on that conversation, right? Because if you really listen, you will be able to tell the nuances of like, what might be the red flags or not over time? And so yes, that might be but it's up to you to, to kind of probe and get that founder to feel that trust to be able to share, you know, like where, you know, where has this investor potentially may have? could have done better, right, or fallen short? Because eventually we have to share a story too. And you can kind of understand how that lands?
And is there a part in the process you'd recommend for founders to start doing that kind of questioning? Is it post, like really explicit interest? Or can it be as early as the first meeting, and I've got instinct,
it can be I mean, so you know, when you're, when you're pitching, and you're kind of just forming this relationship, it's kind of you're feeling it through the entire time, right. And so you could start the first time, but I think in the beginning, usually founders are just inundated with just the pitch meetings and the diligence process, it's hard for them to prioritize, you know, who which which VC to actually start referencing, because they don't know who may get to the finish line with them. That said, if you feel like the ball is really going one direction, and you think that you're going to team up with a certain investor, get going and start you know, because the you don't want just like a marriage, you don't want surprises after you get married, right? And so the more that you can do that diligence upfront, the better it is.
Perfectly, so I'm gonna end with some rapid fire questions we can get through the last one. First was what do you recommend we use in the subject line of cold emails to grab your attention? Oh,
honestly, it could just be something like company name. And I mean, it's, it can be really easy as just what stage it is company name and any sort of compelling metrics that your compelling selling point that you can see in a few keywords on what like your business, right? Whether it's scaling rapidly, or it's like the category creator in a certain area, but those kind of those lines work.
It doesn't need emojis. Yeah, it doesn't emojis. At Norwest, I'm guessing you guys offer more than just financial support. So if you could name some of the things that you guys have been supporting your startups with beyond capital, that would be helpful, too.
Yeah, you know, one of the benefits of being in the business for a while is that we have a bunch of portfolio services to help build and help scale the companies that we work with. I think we realize that every day founders have to make a lot of decisions with imperfect information. And so to the extent that we can supplement that with data that we've just kind of, you know, acquired throughout the years, as well as our network, it's oftentimes the best safety net and so we have an in house recruiting team. And so their role is really to know who the best talent is out there. Who are the free agents and or who are the free agents that we know are amazing that will kind of like put in front of you to try to you so you can help sell to see if they can join your business. And so we have different functions around recruiting to HR advisory, finance, tax General Counsel, so a lot of resources to help as you scale on a free basis. It's really there to help you save time and save money.
Perfect. Lisa, it was such a pleasure to spend 40 minutes with you this flew by thank you for your advice and tips. And for any founder who I'm guessing wants to get in contact with you, what is the best way to reach you and where should they really reach out to you?
Yeah, you can send me a message on Twitter. I am the Lisa will. Or you can shoot me an email. It's lw mvp.com Okay,
perfect. Lisa, thank you so much, everyone. Thank you for tuning into early stage. Enjoy the rest of the day and you will find our recaps on techcrunch.com pretty soon. Take care.