The VC Will See You Now at the “World’s Largest Office Hours”
The three laws of getting a meeting with a VC: 1) If you don’t know somebody who can provide a referral, don’t even try. 2) Start about four months in advance. 3) Once the meeting is on the books, assume that it will be rescheduled at least twice, and probably again on the day of the meeting.
Venture capital partners, in short, are busy people. Every entrepreneur with a business plan wants to meet with them—and that’s to say nothing of all the meetings they have to attend at their existing portfolio companies. So their calendars are always full, and always shifting.
To their credit, VCs know they have a reputation for being inaccessible—especially to entrepreneurs located outside traditional venture hubs like Silicon Valley, Boston, and New York. That’s why the National Venture Capital Association has decided to try something new at its annual meeting, which will take place here in San Francisco on May 14 and 15.
During what the association calls “the world’s largest office hours,” venture partners from 60 member firms will spend two and a half hours meeting with entrepreneurs who hail from 20 U.S. states and three foreign countries. All told, the association selected 160 pre-venture-funded companies for the sessions, and each of them is guaranteed to have meetings with at least two firms.
It’s all scheduled to take place from 3:00 to 5:30 pm next Tuesday in the ballroom of the Westin San Francisco Market Street [corrected 5/6/13: the event is not "tomorrow" as this sentence originally stated]. That’s the headquarters for the NVCA meeting, which has been rebranded this year under the name VentureScape.
“The NVCA meeting is the largest congregation of VCs anywhere, but it has always been a closed, inside-baseball event,” says Venky Ganesan, a Menlo Ventures partner who was the lead organizer for the office hours session. “We changed to ‘VentureScape’ to focus on doing something different, and one very important constituency that we didn’t have before was the entrepreneurs. They are the reason we all exist. They are the folks who create the jobs and make innovation happen.”
Ganesan says credit for the office hours idea goes to Emily Mendell, NVCA’s vice president of communications. More than 200 companies applied to attend the sessions; those selected from outside the Bay Area are being flown in at no charge, courtesy of American Airlines.
“This gives people at least two, and in most cases three to four, opportunities to be in front of the right people and present their stories,” Ganesan says. “A lot of entrepreneurs will never have had that opportunity, either because they didn’t know the right person or they are in the wrong geography.”
All of the selected companies have raised at least some angel money, crowdfunding support, or friends-and-family funding, but none of them have yet raised a venture round. The idea isn’t necessarily to send the entrepreneurs home with term sheet. Rather, Ganesan says, it’s to give them a chance to sharpen their pitches and get feedback from veteran investors.
As it selected companies for the event, the association put a special emphasis on those led by women or members of minority groups; those from regions that have historically been underserved by the venture community, including the Midwest and the South; and those from sectors that venture firms often overlook, like hardware, cleantech, and medical devices. “There have been a set of folks who have not been able to get access to VCs, and we said, ‘Let’s expand that,’” Ganesan says.
I talked to entrepreneurs at two of the startups selected to take part in the office hours. The first, Emeryville, CA-based Revolights, is working on a radical new kind of wheel-mounted bicycle light that makes nighttime cyclists more visible from the side, as well as the front and back.
As a hardware shop, it’s the kind of company that would probably have a hard time lining up VC meetings through the traditional route—which is why it has raised most of its money to date through Kickstarter. In two separate campaigns, the five-employee company has collected more than $250,000 from donors.
But Revolights founders Kent Frankovich and Adam Pettler feel it’s time to graduate to the big leagues. “Bootstrapping in our industry is actually pretty risky,” says Frankovich. “If we have to wait to raise the revenue we need to take it to the next step, we are inviting competition.”
Frankovich and Pettler think the biggest benefit of going to VentureScape will be getting some free advice. But some investor interest wouldn’t be unwelcome. “We want to hear what we’re doing right and what we’re doing wrong, and how to fix it,” says Frankovich. “The secondary thing is that we want to meet a lot of VC firms and find some that might be interested in our company.”
Frankovich and Pettler hope that their selection for the office hours event is a sign that venture firms are warming up to hardware-driven businesses. “We are absolutely not naïve to the fact that when we go to a startup convention, there are like, three hardware projects and everyone else is an app, especially here in the Bay Area,” Frankovich says. “So it’s kind of cool to be accepted into things like this, because we are going up against really interactive, low-overhead kinds of companies.”
In Portland, OR, entrepreneur Huston Hedinger runs one of those low-overhead companies. Formerly known as Wikisway, it’s been rechristened Graph Alchemists as of today, and Hedinger will also be giving his pitch in San Francisco next week.
“We provide a graph infrastructure as a service to large enterprises and all the way down to startups,” Hedinger says. Graph databases—which store data as a collection of nodes and edges, rather than rows and columns—are one of the hottest things in the big-data world these days: they’re behind services like Google’s Knowledge Graph and Facebook’s Graph Search.
“The big challenge to make use of the power of graphs is that you have to have a solid understanding of what a graph is, at the academic level, and then you have to understand how to use it,” Hedinger says. “We allow people to make use of graph databases in their own applications.”
Graph Alchemists has raised $200,000 in seed funding from angel investors and the Portland Seed Fund, and was recently admitted to the Atlanta, GA-based startup incubator Civic Accelerator. But to scale up, Hedinger knows his startup will have to look beyond the accelerator world, and beyond Portland.
That’s why he applied to attend the NVCA office hours event. “I don’t expect to walk out of the meetings with a check in hand,” he says. “If we happen to meet a VC that is participating at the seed stage and they want to talk more, great. But I think any smart entrepreneur would take it as a learning opportunity—a chance to talk more with these folks who you usually have limited access to.”
Ganesan, who reviewed all of the startup applications, says it’s a strong group. “I am sure that 5 to 10 percent of this class will end up raising venture money from someone,” he says. “We will capture what happened, and at office hours in 2014 I am confident we will be surprised at how many high-quality companies emerged.”
Attending the office hours event is seemingly all upside for the entrepreneurs. But what’s in it for the venture partners? I put it to Ganesan that a jaded observer might see it as a ploy by the participating VCs to get an early look at a whole bunch of companies at once—a compressed and efficient way to do something their LPs expect them to do anyway.
“I can totally see why you would think that,” he said. “But let me tell you, sourcing is not a problem for most VCs. Most of us have to say no [to meeting requests] 90 percent of the time. So, to me, this is not about making our jobs easier. This is really about that woman entrepreneur in Florida or Detroit who doesn’t know anyone in venture capital, who hasn’t had friends who were backed by VCs, to go and show what she is doing. This is what makes the office hours special.”