A bigshot VC reached out to you. What now?

You open your inbox, and there it is: a message from a big-name VC. You can’t hide your excitement, so you share the news with everybody around you – from fellow founders to your staff as well as your family and friends.

Of course, you feel the need to say yes to the meeting immediately. But do you really have to hurry?

As a four-time founder and former VC scout who has been on both sides of the table, I know how important it is to think first before agreeing to meet with a VC. I hope this article helps you figure out your next steps and manage your expectations when one reaches out.

Image credit: Timmy Loen

Get into their minds

To understand VCs and their motives, you need to start thinking like them.

VC investments follow the power law, so backers are on the lookout for startups that will generate all of the returns for the entire fund upon exit. In short, these investors are looking for unicorns.

The problem, however, is that VCs don’t know how these magical creatures in the making look or what industries they are in. For guidance, VCs come up with investment theses, which are insights they believe to be true. Still, they’re keen to validate their thinking.

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To sketch out the treasure map, they send entry-level employees – such as associates and analysts – to scout as many relevant startups as possible. This explains why a VC’s interest doesn’t automatically mean they’re ready to write the check.

Much like understanding what motivates VCs, it’s equally important to be aware of the factors that might cause them to hold off on investing.

Geopolitical timing of the outreach

The macroeconomic climate is unfavorable during a fundraising winter. As such, VCs are not keen to invest because their own investors – known as limited partners (LPs) – are risk-averse.

Unavailability of funds

The VC might not be actively deploying capital because they are in between funds. Simply put, they have spent all their money and are in the process of raising fresh gunpowder from LPs.

Know yourself

Flip the script

Stay grounded