There are a number of keys and practices to keep in mind when selling the business model to the private equity and venture capital communities, as well as to family businesses. These considerations are aimed at two types of profiles:
- Companies that sell directly to private equity funds, venture capital and family businesses.
- A much larger universe of B2B companies, many of which have teams focused on driving and engaging with venture capital and private equity funds to evangelize the product and company in those funds' portfolio.
It is not an exhaustive guide, but just some ideas that are often not being exploited. In any case, as it is always to use personal relationships, take advantage of references; Leverage existing and even potential clients to make presentations.
In roughly descending order of impact, a number of ideas are outlined:
- Invest in funds. By investing in funds, they will promote the new business within their portfolio and community for at least the next 5-10 years. A good example of this is Silicon Valley Bank, which has a very active group of venture capital funds of funds.
- Organize round tables or dinners strictly focused on the target market for the sale of the business. It's easier to sell to 100 target market people in one room, rather than setting up 100 one-on-one meetings. An example of this practice is Teacher. The founders of were associated with PEVCTech to organize a Dinner strictly for partners/principals of private equity and venture capital firms. With a projector and a screen, a complete tour of the product and the value offer was carried out. Exactly who was in the room was controlled, so we didn't buy dinner for anyone who wasn't considered relevant. This exercise has minimal financial risk, because if an appropriate relevant amount is not attracted, it is simply canceled and the restaurant refunds any deposit.
- Join venture platforms that help tech startups and venture capitalists identify vendors. Some of these intermediaries are Versatile VC, BuiltFirst, FundedBuy, Clutch, Spot Source y Concert (for professional service companies). Another example is PEStack that helps private equity funds identify the right technology providers for their needs.
- Identify relevant industry associations to ensure the product is aligned and if any opportunities exist to build relationships. Tim Friedman, CEO, PEStack and partner in Versatile suggests: “For example, go to a professional association and study their best practices for reporting / ESG / due diligence. Discuss if there are any opportunities, for example, they have a members-only technology vendor database for technology focused on their industry.”
- Monitor social networks. Victoria Vessecchia, Sales Director, grata.com suggests: "Leverage social media platforms, job change alerts through Linkedin Sales Navigator, to monitor potential accounts."
- Technology consultants sometimes have access to larger companies. Firms such as Lionpoint, Steelbridge, Holland Mountain and IVP can be identified, in addition to traditional consultants such as EY and KPMG. “They are selecting and deploying products for customers. Even relatively young companies can do this, for example Lemonedge in the UK is an early stage company that has already signed material partnerships.”
- Identify and approach key integration partners. For example, if your product is based on data ingestion, it's wise to partner with companies like Canoe, Alkymi, Accelex, etc., or at least understand how they work. For example, Addepar (a portfolio company of ffVC) has a partnership with Canoe.
- Consult the online communities where investors congregate. Many of them are strictly for Investors, but investors in the company can be asked to evangelize for the startup in those communities. You can also sponsor your own events. There are communities for investors, new managers or generic dedicated to financing. It is a good exercise to receive advice to have a list, know them and enter the appropriate ones.
- Expand sales and investments based on remote technology. Applying the best practices to make online sales and investments as easy as in person is easy with the right advice. Even so, in a globalized world it is a key option that allows movement between countries and agreements to promote growth outside the local market. If the purpose of the company is the sale of professional services, there are more possibilities if relationships are established remotely with the main players in the market.
