In today’s column I would like to discuss the status of venture capital investment in web3, which to some is just a new fancy way to refer to blockchain technology.
Ever since I joined as a partner in a venture capital firm, I have been receiving hundreds of connections through my social media channels, especially Linkedin. Even more so after speaking at events, like the past week in Singapore.
One particular aspect of cold contacts that I find fascinating, is the lack of call to action. After getting off the stage last Thursday, I had 54 new Linkedin connection requests. Nearly a third of them had no intuitive follow up. The content was something like: “Hi, I am So and So, I work for company So and So. Company So and So does this and that.” The end.
No context to what was discussed during the panel. Maybe a link to a lengthy white paper. But no immediate connection to why I should follow up.
Another difficult enquiry to follow up, is when someone writes a message with an invite to have a call, but does not specify why.
For example: “Hi, I saw you at the conference. Let’s have a 30 minutes chat. Book a slot in my calendar at this link.”
We live in the post Covid work society, where everyone feels fatigued with Zoom calls and Google Meets. Before I schedule yet another 30 minutes call, I want to make sure that it is not a waste of time for either party.
The common trait of the two examples shared above, is that they both fail to explain the potential upside for the VC. They come across as salespeople that want to connect for the sake of marking an extra point on their scorecard.
To them, I would suggest that they take the time to understand what the investors wants to achieve, before they connect. All information are usually available on the website. But when they are not, some probing questions could be great. For example: “Does you VC firm prefer to invest in equities or tokens?” Or: “May I check the vertical and the ticket size of your last 5 investments?”. These questions could help to contextualise and understand if a good fit could be found.
Then there is the shy type. The person that approaches investors with the disclaimer: “I am not trying to pitch.” But that is the whole point.
An investment firm makes money by investing in profitable projects. If the founder starts the conversation with such a statement, then what is the point of talking to an investor? Investors want to listen to a good pitch. The one that makes them go: “Great! That is exactly what we want to invest into.”
That requires confidence in the founder, or anything else following the premise would fall to deaf ears.
Lastly, the founder that is too early to talk to investors. I have been in that category too, and I very much sympathise with that weakness. It happens when a founder wants to pitch an idea, while he or she is still working on a full-time job or on something else.
Investors want to deal with committed individual that have already started building. Capital is just there to help growth and expansion.
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