How to Bait the Hook to catch a VC

I am currently working on a “flyer” or a “teaser” to send out to potential investors for a client and thought I would share my method and template with you to help you if you need to do the same thing.

The purpose of this short document is to get their interest. The objective in this is to get the attention of a Partner at a VC firm and to do this you have to get past their screening process.  While this often involves an intermediary like myself with extensive personal contacts into the VC community, the greater challenge is inside the VC firm itself.  New opportunities are screened by junior associates and only once this has been done does the flyer get wider circulation.  So it had better stand up to the competition from all the other flyers.

Remember this is a baited hook – so don’t give them all the answers.  You must provide enough information to get them interested and keen to learn more.  The odds are around 100-1 against this firm investing in your business so look sharp!  Here is the Six Minute Strategist Guide to writing the Flyer!

1. Structure and Content

Bearing in mind this is a one to two page PDF document, it needs to be well structured and the content must cover the key things about your business.

  • Management
  • Business Model
  • Products and Services provided
  • Customer base
  • Route to Market
  • Financials – 3 years historic and 2 forecast (Revenue and EBITDA or EBIT)
  • Six Key Differentiators – Why Me?
  • How to reach you for a meeting

2.  Clear Statement of Intent

What are you looking for?  It should be very clear that you are seeking capital, how much you are seeking and why?  Is this growth funding, for a recapitalisation, buying out of an existing shareholder (not a popular one – money going out of the business rather than being put to work within the business).  Communicate that you have a clear objective and a detailed plan to achieve this.

3. Style

This should be a well written document, in the third person.  Grammar and spelling are important.  You should definitely avoid hyperbole – keep extravagant claims and language out of this.

4. Accuracy

You must make sure that your statements in the document are accurate and truthful.  Check the numbers (make sure they add up where appropriate).  If you are making a claim but do not have a source, it is ok to state that “the Directors believe that…” but not more than a couple of times.

5. Brevity…

…is the soul of wit.  Never more so than here.  This document should not be more than one or two pages long and in pdf format.  If it comes from an intermediary then it should be properly headed and footed to show that it is being professionally managed.

6.  Annonymity

Use a code name and not your company’s name in the document.  Firstly you do not want them to know who you are and to have to come back to you to ask you or your adviser.  Secondly, this document is out in the public domain – whatever they say – and is likely to be shared around.  If it reaches another VC who has an investment in one of your competitors, they may use it for their own nefarious marketing purposes.

What Next?

Take a look at my FREE video Tutorial “How to Turn Your Great Idea into a Business” which is all about Starting a Business and Raising Capital.

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