Comments: How to communicate effectively with VC?

The goal of communication between startups and venture capitalists is to quickly build mutual trust and eventually reach a deal.　　However, in the past some time I experienced in the private case, there are many entrepreneurs in and venture capitalists (hereinafter referred to as VC) in the process of communication is not the way, or even the opposite, ultimately greatly affect the efficiency of communication, and even missed a lot of good opportunities for financing.　　Thanks to me and the venture capitalists and VC have no direct interest in the third party identity, I can be fair to say that I have some views of the two sides, I hope to be doing private equity financing entrepreneurs have some reference meaning. 1, talk about their own good business some of my entrepreneurial friends in and VC Exchange, the mind is always a bit disturbed, because they think that the control of the VC billions of yuan work is very mysterious, do not know what they think. Some friends even take it for granted to talk to VC about some of the topics in the capital markets to close the relationship. Indeed there is an example: once I called a friend of VC, a friend of the venture to eat together, the purpose is to hope that my two friends to achieve business cooperation. However, chatting about the topic does not know how to go to buy the game company's stock, as a result, the whole dinner has turned 2/3 of the time has become a discussion of Jinshan, netease several companies in the future a period of stock price trend, my entrepreneur friend said the exultant, and finally gave us the recommendation of two stocks.　　After dinner, my VC friend said to me: xx (entrepreneur Friend's name) is a good friend, but entrepreneurship may have problems, his interest is not in his business. There is another friend, his background is very good, in the domestic very leading game company to do a number of game planning, Master planning, this year also set up their own company. In the process of financing with VC, when talking about their advantages, he particularly likes to talk about his own in the United States to buy shell listing some of the operations (this friend has an investment in the United States to help him spend more than 100,000 dollars to run the matter), to show that he has a clear listing planning　　He may feel proud to have done something he has never done before in the capital market, as everyone knows, in the professional investment in the eyes of his big step in fact is only a very small step, really important is his products, users, operations, these are not yet talk about what listed ...　　So, what should we talk about? Should focus on their business in a limited time!　　For game companies, the focus should be on the composition of their core team and the background of the team, the company's technical reserves, game product positioning, characteristics and understanding of the game product target users-these are the game companies are good at, in fact, VC is most concerned about, after all, they are counting on you to do the game business to make money.　　Talk about the business you are good at, do not talk or talk about what you do not understand, will make investors feel that you are professional in the field of business, and will not let him feel that you are not reliable, like blind. 2, good at digging their own advantages investors like to ask a question is: "What are your core competencies?" "How to answer this question?" Never have a perfect enterprise, must learn to tap their own advantages. The first principle is truth, don't lie, talk about facts--I'll discuss why not to cheat investors later.　　The rest is the trick: a clever comparison. The best way to describe a particular aspect of your company is to compare it to a similar company. In a recent case I had a feeling that one of my friends had been worried for a long time about persuading investors that their 3D engines were the best in the market. Then we talked about the best way to make a list of the n elements that determine the quality of the game's engine, and then, for those elements, to compare their engines to some of the mainstream engines in the market--and the investors quickly recognized their engine quality after seeing the comparisons.　　In the ensuing communication, the investor thought the team was flawed (the team's background was too similar), then the problem was solved--we went through the discussion and agreed that the team was in a great development perspective, and in this niche, there is no better team!　　Oh, think of a joke on Wall Street, no matter how bad the investment bank, as long as the selection of the appropriate standards, always can find the leading reasons, such as: XX investment Bank is "1990 's, underwriting the amount of 100 million ~5 billion, the number of the largest IPO underwriter" ...　　Second, the evasive. Competitive advantage embodied in many levels, the team? Products？ Executive power? Technology？ ...　　It's hard to have a team with all the advantages at the beginning, but you should have at least one advantage, and the advantage is that it allows you to quickly build up other competitive advantages. My other friend used to be a traditional industry, last year entered the online games industry, he is I respect a person.　　In his talk about the process of private financing, almost all investors do not look at him, because the online games industry water is too deep, not knowledgeable people come in to pull a team to do their own, one is afraid to find a good team, the second is worried that even if a good team is not necessarily good management. However, my friend is very persistent, he actually spent 3 months to build a pretty good team, the core of the team are mostly in the industry with more than 5 years of experience, and have successfully developed 100,000 online products experience. This time still some investors worry: people are found, team running-in will have problems? I said to them: you have seen a traditional industry people rushed to the online industry inside, but also a hand to establish such a good team precedent? He has a very strong executive power! There will be no problem with the team running in the future.　　Moreover, he has experience in the management of large companies in traditional industries-and this is the lack of the current online gaming industry, which is very helpful to him in running the company.　　Now, a lot of investors are continuing to follow my friend's company, 3, less complaining about why, many gaming industry startups bosses complain a lot. They complained about the former publicDivision resource poor boss is too stupid, complaining that the current investors to the pressure too much interference, complaining about the current ability of a subordinate to affect the duration ....　　I think their complaints ten true, because the game industry does have a lot of bad bosses, ignorant investors, muddling through employees, but who is willing to invest in a disgruntled entrepreneur? I have two friends, and they have almost at the same time to get the same large company (hereinafter replaced by "XX") the amount of investment, are engaged in the development of MMORPG. Friend A often said to me: XX company is too TMD bad, time card tight, financial control strict, tube project people don't understand, always urge us. And, you know, even if my game on the line, I can only be divided into a few points of income, really can't get .... You quickly introduce me to an investor, I want to come out alone, I want to do another round of financing! "Friend B often said to me:" xx is really good, gave us tens of millions of investment, so I can play the game to develop, and, their experience in the gaming industry is also very rich, often can help me. I asked him: Do not you think XX in the financial and project progress control too tight, give you too little money? Friend B said: "Well, you're right." However, the financial and project control of the tight, there is pressure to drive it! Although the money is not much, but it is emergency funds, and, let me take this money to feed my dozens of brothers, and the Running-in team, there will be a chance to make money! "If you complain too much, especially if you complain too much about your former boss, the current investor will be cautious and may doubt your character or ability." To know that everything is two sides, good entrepreneurs must be able to quickly adapt to the environment, and occasion growth.　　The different reactions of my friend A and friend B in coping with a similar situation just illustrate this point ~ Rose is also a thorn, if only see thorns, but can not see the flowers, it is hard to believe that such a person can seize the big opportunity.　　4, grasp the communication process of the falsehoods Venture company in order to let VC believe that their strength, talked about something must be a virtual reality, but how to grasp the degree of the actual situation is worth thinking. In general, it must be true for the things that have happened, the people and things that already exist.　　But for what has not happened, such as the trend of the industry, the company's profit expectations can be virtual. Good VC network resources are often very strong, for a thing that has happened, if you are not telling the truth, or even black-and-Black said, almost certainly will be he found that the end will often fall a bad result. Many entrepreneurs in order to let VC make investment decision as soon as possible, like to VC said: "XX fund and I signed Termsheet, you must give me an answer before X month x, otherwise you will not come into our company", if the XX fund really and the entrepreneur signed a termsheet, That's okay, the entrepreneur is to give VC left a poor understanding of the image-Because any decision within the Fund will also take a fixed process, it will take time, not rush. But if not sign termsheet, finally almost certainly will be VC discovery-to know, VC Circle is very small, everyone will often exchange information!　　This will let VC doubt your integrity, the seeds of suspicion once in the heart germination, both sides will be difficult to establish a mutual trust relationship! Not only that, have seen the VC due diligence friend should know, VC to the company's investigation will be detailed to how scary the point ... VC will launch all the people that are associated with the project, they may find their former colleagues, bosses, subordinates and even family members to talk about their views on entrepreneurs,　　Will find a variety of industry experts to judge the actual business situation ....　　Therefore, for what has happened, the existing people and things, must be real. However, for the future of things, can be unrestrained, give full play to the entrepreneurial business of the forward-looking judgment-for the future planning is in fact one of the most attractive VC places, who is willing to invest in a company that does not know the future trend? There is no denying that many entrepreneurs are relying on the industry's strong prospects for the good judgment, and finally let investors admiration!