What are common mistakes when building a relationship with a VC mentor?

Don't ask for money, wait till they offer you! If you are building a solid business with a profitable outlook, a large market size and a good profit margin, then your mentor will automatically offer you money.

If you are looking to be mentored by a VC, it’s important to be genuine about what you are expecting to get from the relationship and why you are seeking advice from the particular VC. Founders sometimes misuse the advice of 'Ask for money, and you'll get advice; ask for advice, get money.' If you don’t care for the advice and you’re really just after the money, you are setting yourself up for a disingenuous conversation which will likely not lead to a positive outcome. However, if you are truly after getting advice, you’d be able to build a good relationship. If the VC takes a liking to you and your business, they will bring up the possibility of funding when the time is right.

Today's Investor relation building is more on the connection that are based out of how good bonds you have created with the VCs or angels. Its highly important for founders today to walk the investors through the day to day activities of the venture for atleast for 2-3 months to create that trust in the execution of the business even when the business is in negatives as present. This helps to get conviction in the investor's eyes and believing in the idea along the market potential. One real time example was of during covid, where many startups started doping even after raising capital. Maximum of the investors instead of taking exists continued to infuse funds for the survival as they had a belief in the founders instinct and the vision.

Mentoring and Investing are two separate topics. It's best to get crystal clear what you are looking for in the relationships. VC mentor is someone who invests their time, energy, knowledge, and (potentially) network in your business. Investors are someone who invest their money, not necessarily want to mentor you in the business journey. As always, if you are asking for money or funding, it's best to build relationships, have strong business foundation and have enough traction before you do so.

One of the most crucial aspects towards growing a company, are the partnerships that you can build with your investors. Most VC firms not only pump in capital into the company, but also bring along a huge network of businesses and individuals who will help the entrepreneur scale the business. If an entrepreneur asks for money right upfront, it portrays the inability to build a partnership from the entrepreneur’s side. I would step away from such an investment opportunity.

Don't be too vague or aggressive to your VC mentors or any mentors. Often, mentors are giving their time to help startups on a voluntary basis. Never just ask a VC mentor or any mentor to introduce to a list of potential clients on the very first call. You need to build some trust first. Furthermore, be specific why you want to reach out to them. Remember, VC mentors are contributing their own time, for free, and they are not your employees.

VCs like myself won't give advice, but we'll provide private feedback. This leaves room for more exploration of the nuances around business--and emphasizes the control a Founder truly has to learn and grow.

Be specific. What is the top 2 issues that prevent you from sleeping at night? But first start by showing interest in the other person. What are they doing? Why are they here? Once you got that down, and you get asked about your issue, be specific. Describe your situation. Then what you think is your problem. And the potential solve that you either have tried or are going to try. Then ask for his opinion. It can be hiring, closing contract, getting to talk to VC... The more specific you are, the more work you did upfront, the more efficient the help you will receive. The mentor might disagree with you on the issue, the diagnostic, the solution... But you started the discussion, you were respectful, and showed that you mean business.

A good entrepreneur communicates the goals they have set for themselves at every stage. The entrepreneur expects the VC to assist in both reaching and maybe even surpassing these goals. However, poor communication results in misaligned goals on both sides, resulting in VCs often putting pressure on the team and sometimes even having to bring in outsiders to boost leadership capabilities. I believe that the underlying strength in a VC- Entrepreneur partnership is effective communication.

Understand what strengths, skills VC mentor brings to the table. Be prepared to structure conversion by bringing up aspect of business around it. It might take few attempts to uncover that area. Set realistic expectations around achievable goals , areas of improvement taking into account VC mentor expertise and motivation.

You are not forced to apply the advice you receive. In fact, one of the first thing I tell the startups that I advice is to take my advice (and anyone else) with a grain of salt. But if you hope for a sustained relationship, you should be clear about it, and explain your actions whenever possible. Otherwise, your mentor will disengage. If you are not regular in your update or clear in your actions, that reflect poorly on your professionalism. That will in turn pass the message that you either don't care or are not disciplined in the handling of your startup. Neither of those will support your case. You already are talking to a VC. So don't waste your success.

It depends on the stage of your business and the type of investors or VC mentors you have in your network and conversations. Some might require monthly updates or quarterly updates, some might need annual updates. It's also good to clarify on what they expect and check in with them if they are comfortable with the cadence and updates.

Very easy to send a: here are the 5 insights I took from the convo. And then in two weeks: here are the ways I implemented or decided not to take the feedback. This makes you stand out significantly and deepen the relationship.

Many startups ignore the VC-startup fit, intentionally or unintentionally. Some VCs are industry and stage agnostic but most VCs operate in pre-determined investment/geographic scopes. Therefore, it is important to always ask the VC mentor first. If they say there is no fit, there is usually not a fit. Don't try to convince your VC mentor otherwise! I would be more than happy to forward a startup to other VCs in my network if a startup fits their scopes if I like the startup.

Entrepreneurs should aggressively defend their business. However, it is of utmost importance that the entrepreneur puts in the effort to view their business from 360 degrees. Many a time, entrepreneurs are subjected to advice that isn’t the most pleasant. Maturity comes when the entrepreneur absorbs the advice, manifests it and takes the necessary action. Btw, action could also be to ignore the advice as long as they have given it a good thought.

Startups need to tune into what VCs are currently favoring. Study their websites to get a feel for their portfolios and investment strategies, seeing if your startup might fill any gaps. Don't overlook valuable online platforms like CrunchBase and AngelList either. They're excellent resources for information, from SEC filings to press pieces and even insider details, all of which can give you a clearer picture of the VC landscape, including the specific companies and stages of funding they're most interested in.

Finding the right VC mentor takes time. It takes a bit of researching, asking around, and networking to find someone who has the expertise, experience, knowledge, network or time that you are looking for. It's not going to happen overnight.

Mentorship should be treated as any professional interaction. Would you just pick any plumber just because you have a leak? A leak in a factory hot water system is not treated as a clogged toilet, and most likely not by the same professional. Does the mentor have skills and expertises that can be used or transposed? Some can easily be transposed. A business and management advisor will be transposable to most business (not all, though). Other are extremely field specific. Do not neglect that. Test your fit before engaging more. Or understand that there is no direct fit if you still want to engage to adjust your expectations.

What do YOU bring to the table? It is easy to forget as you come to a mentorship relation to get something. And the mentor usually comes to give back. But you will get much better engagement if you bring something to the table. It might be teaching something. It might be interesting contacts or answering some of the mentor questions. Don't forget to be grateful. An experienced professional is taking some of its most valuable commodity, time, to help you. Don't take it for granted. Be grateful. And show it.

If you give deal flow they will think your company is better…?? But actually it makes them much more excited to help. Help your fellow founders with intros that are mutually beneficial.

Don’t be mentored by VCs. Get mentorship from other founders. Although, Having VCs as strategic sounding boards or to chat with for market insights is hugely valuable.

Never treat your VC mentors like they are your employees if they are giving up their precious time to try to help your startup to succeed.

Building a healthy relationship with a VC mentor is rewarding. Founders should remember to keep their promises realistic, as trust is built on what you deliver, not just what you propose. Deeply understand your business and its mission, as preparation shows respect for both your mentor's time and expertise. Embrace their feedback; it's more than capital—it's wisdom. Communicate openly, sharing your highs and lows. Finally, align your expectations from the start to ensure a mutual understanding of your relationship’s goals. This mentorship is an opportunity for growth, grounded in mutual respect.

I believe few founders don’t know about the real facts about their startup, which every venture capital would want to know before making any decision of funding. Knowing every dot is something which each founder should know before approaching VC for funding.

You are not owned anything. Some people might help you. They likely are getting something out of it, even if it is only the satisfaction of giving back. But that doesn't mean that they have to give to you. They could just as easily give to someone else. So be kind, respectful and listen. You might disagree, and you can argue, but listen first and be respectful. The mentor saw more than you. It can be a drawback for some specific things, but it usually lead to very valuable knowledge. That knowledge is his to share, and it doesn't have to be with you.