First-time meeting with a VC and Angel Investor

Just to give some background, I'm building a software as a service offering which is almost in private beta and I have a few customers lined up to start using it at launch. Its a solo gig so far, and I've been bootstrapping everything myself. I'm a programmer and I'm not entirely clueless when it comes to talking business; but, talking balance sheets, valuations, and cash flows is definitely not my forte.

I recently set up two meetings, one with a venture capitalist and another with a prominent angel investor. They are both people I've networked with in the past (so they know who I am), but I haven't sat down with either of them to have a discussion about this particular venture. The meetings are each about 45-60 minutes.

As far as what I'm looking to get out of this, I mainly thought that they would be good people to give me advice and put me in touch with people I may want to partner with. I haven't actively been looking for funding because I haven't needed it yet, but I'd be open to it now that I'm about to launch a private beta.

So now the question...

What questions should I expect to be asked and what questions should I ask them during these first meetings?

Surely not a comprehensive list, but in my experience, the most important questions you should expect are:

• What are your goals in the next 3-6-12 months? Be honest, don't lie and convince them that they're realistic goals and you have a plan to achieve them.
• Who are your existing customers/users/testers? Again, try to be honest and bring some testimonials and evidence that your product works for them (even critiques are fine as they show that your users have actually used the product); show that you take feedback very seriously and use it to improve your product.
• What is your business model? Just have a rough picture that shows you have thought about it, but don't show sales predictions too early as they're generally useless; in other words, make sure you know how to make money and leave the "how much" part for later, when you'll better understand your own market and customers.
• What are your competitors? Make sure not to answer "there are no competitors", and show you have a good understanding on what they are doing and how you differentiate. Possibly, avoid explicitly mentioning your competitive advantages, as those are somewhat volatile in the software industry, unless it's something that no one except you is able to build.

I would ask them:

• What is their understanding of the market you're entering and if they have any advice.
• Whether there are competitors you should be aware of.
• Whether they know of additional usage scenarios of applications, according to their experience.

I recommend you read Guy Kawasaki's book "Reality Check". It's excellent, covering most areas of a startup including meeting with VCs and more. It will give you good perspective from their eyes.

Check it out at: http://www.amazon.com/Reality-Check-Outsmarting-Outmanaging-Outmarketing/dp/1591842239/ref=sr_1_1?s=books&ie=UTF8&qid=1286600316&sr=1-1 Best of luck,

Well like you said Javid, this is just a meeting to get familiar with them and introduce them to your product and you. Unless you all are talking money and getting serious I wouldn't disclose the mechanics behind your software. Get a feel for them and if they have actually invested behind successful tech startups in the past. Find out how much ownership they usually look for and what expectations they have from their businesses and its managers. Remember to tell them that you are looking for potential partners and would appreciate their help. Good luck

Even better is to check out Guy's book The Art of the Start. I don't agree with everything in it 100%, but it's an excellent framework for pitch decks to investors and partners.

Treat is casual and confident. Dont ask for any help, any investment. Ask vague questions, and say you value their feedback. Keep an open mind, some investors are very specific.

Remember most are sharks, so to get a good investor ask about their resume, experience building companies, and ask them how they can help you out to make the product better.

Never sell numbers!
NEVER

it turns off most investors.
dont go in saying something like if we had 1% of the market we would make xxx!
investors like to figure out the numbers on their own, they can figure out how big the market is, or get it from your printed collateral rather than hear it from your mouth.

Be confident, show that you believe in yoru product, and make them understand that you are going to be the next big thing with or without them. That your company solves a real problem, and offers a genuine service. The right investor will find a way to be a part of your product because they believe in it, and since they do, the $$$ is just a tool to esure that you will be successful.

Best of luck.

PS dont get discouraged if these two investors are not what you are looking for. Usually you have to spend 12-18 months to find a decent backer, (time i always believe is best spent in reinvesting in your own product)

FB

VCs and angels like any empirical evidence you can give to them. Demonstrate that you have an existing user base and how/why it will grow.