Just because you've caught the attention of a VC doesn't mean your problems are over. You need to find out if this is the VC for you.
- Do you know anything about the VC firm?
- Have you talked to any of the companies it has invested in in the past?
- Do the homework on the VC just as the VC is doing it on you.
- Get a list of companies and contacts that it has invested in and find out how the relationship has been working for the other start-ups. Are the companies happy with the relationship? Has the VC been too controlling? Have they gotten what they expected? Have they given good recommendations and had good contacts for other business activities? Have they been accessible and good about returning phone calls? Have the other companies flourished or failed?
Each of these questions is important in determining whether the VC firm is the right one for your company. Remember, once you've gotten its attention and interest, you're still only half-way there. Also remember to:
- Have your company's financials in order (and preferably very solid).
- Make sure the terms of the deal are equitable and agreeable to everyone.
- Make sure the VC firm has experience in your industry, and understands your market.
- Try to find a good match of personality types so you have an enjoyable relationship rather than one that is a chore to maintain.