[PREMONEY MIAMI] Intel Capital >> Christine Herron, "How To : Generate Deal Flow"
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Christine Herron Director,Intel Capital @christine
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[PREMONEY MIAMI] Intel Capital >> Christine Herron, "How To : Generate Deal Flow"
- 1. How to Generate Deal Flow Christine Herron @christine VC Deal Hunter and Brand Builder PreMoney Miami 2015 March 20, 2015
- 2. How to Generate Deal Flow Christine Herron @christine VC Deal Hunter and Brand Builder PreMoney Miami 2015 March 20, 2015
- 3. 1. Know yourself. In five years, what does a “NewFund” deal look like? How will other VCs know who to send to you? What commonalities are in previous deals? Christine Herron (@christine) PreMoney Miami 20153
- 4. 2. Remember that coffee is for closers. Know which investors and influencers are working with companies before your preferred investment stage, and get to know them. Set and attack target areas of interest. Remind people that you exist regularly, to stay top of mind. Christine Herron (@christine) PreMoney Miami 20154
- 5. 3. Just say “no” to FOMO. Define your leads filter early, or get overwhelmed. What size, sector, stage of deal do you want/not want to see? What kind of entrepreneur do you believe in and like working with? Christine Herron (@christine) PreMoney Miami 20155
- 6. 4. Share your passions with the crowd. Develop a point of view relevant to your investment focus and use social media/speaking as platforms to share it. What are you an expert on? Promote your portfolio in order to build your own brand. Christine Herron (@christine) PreMoney Miami 20156
- 7. 5. Don’t turn your back on others. Every VC’s money is green, so relationship and reputation are often winning differentiators. Reciprocity is a strong industry dynamic, so invest continually in your ecosystem and community - what goes around, comes around. Christine Herron (@christine) PreMoney Miami 20157
Editor's Notes
- Deal flow is the #1 reason LPs will choose to invest in a new fund, particularly one targeting early stage. More so than deal judgment or deal harvesting – without an unfair advantage in deal flow, your fund won’t see the light of day.
- Deal flow is the #1 reason LPs will choose to invest in a new fund, particularly one targeting early stage. More so than deal judgment or deal harvesting – without an unfair advantage in deal flow, your fund won’t see the light of day.
- What kind of deals are you looking for? Think about size, stage, sector. What kind of entrepreneur do you like to back? How do you want to work with the companies that you invest in? How do you add value? Review results of my own exercise.
- Can’t wait for deals to come to you. Proactive deal sourcing discussion. Start with building immediate network of people who know the space you like and have access to deals. Hunt down who invested in the rounds youw anted on other deals, as well as who had invested in round prior to the deal you wanted. Start trolling news sources and blogs that focus on areas you find interesting. Reach out directly when you have interest. If people haven’t seen you lately, they won’t have you top of mind when they see something relevant. Figure out how many entrepreneurs you should talk to per day, then start hitting your numbers.
- Even with focus, easy to look at 1000 early stage deals a year – albeit some very cursory - and do two. Even visiting a few Demo Days will result in ~300 companies to consider/year. (YC 75/class; 500 25/class; StartX 15/class; etc.) Define your leads filter. Given your ideal investment, what kind of deals are you looking for? Think about size, stage, sector. What kind of entrepreneur do you like to back? (e.g. white, nerdy, Ivy-educated males counts as a filter.) How do you want to work with the companies that you invest in?
- Social media and speaking engagements enable you to access 1:many – dissemination of interests can deliver great leverage, have leads weed themselves out. Also helps to build brand…then ecosystem can evangelize for you. Also an easy way to remind people that you’re there, and that you’re looking for X.
- Reciprocity is one of the guiding principles of venture deals. If you don’t send me deals, I won’t send you deals. Ideally, make investments that demonstrate you are welcome in syndicates. Ask before making intros, then make good ones. Remember that you live on your reputation – venture is a relationship-driven business. Money is green and is hard to differentiate as a new investor. People work with people they like, all other things being equal. Most good intros will come from people you made a good impression on, including those you have turned down for funding as well as those you have invested in.