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VC Tips: Sell Burgers to Meat Eaters

One of the most common pieces of advice I give to early stage entrepreneurs is to “sell burgers to meat eaters.”

I, like many Californians, believe In N Out Burger is one of the great restaurant concepts of our time (it’s also a compelling entrepreneurial story: read the history of In N Out).  The company’s menu is ridiculously basic – you can order a variation on the same three things – burger, fries, drink.  That’s it.  In N Out really knows its customer, and they don’t worry about catering to “everyone” (you can get a burger with no meat, but it’s still a “burger”).  In N Out delivers a really simple value proposition to a very simple core audience – people who love burgers.

So how does this apply to raising money from VC’s?

If you are pitching your company to a VC, make sure the Partner you are meeting with knows something (ideally, a lot…) about the space you are focused on.  Look up his/her track record.  Ask the person who referred you.  Do some research online.  What are his/her successful companies in the sector?  If he/she doesn’t have any experience in the sector, ask yourself (and him/her) if it’s worth meeting – you don’t want to waste his/her time or yours.

The corollary of this is to not get upset when a VC declines a meeting with you for this reason.  The best VC’s I know will politely tell an entrepreneur something to the effect of “That’s not my area of focus,” “Our firm is not investing in that space,” or “That’s not my area of focus, but I would be happy to introduce you to my Partner who is focused on that area.”  As an entrepreneur, this VC is doing you a massive favor.  The most valuable commodity you have is your time.

Sell burgers to meat eaters.

In this case, meat eaters are venture capitalists who are pre-disposed to like your concept.  They know the market (to the extent that they might even say you can skip the Market slides in your presentation).  They get the business model, no matter how unique it may be.  They understand the financial implications of a successful business in your space (things like high CAPEX, customer acquisition models, bookings to revenue conversion, etc.).  They know executives at relevant larger companies and can make introductions, even if they don’t invest.  In short, a meeting with a qualified meat eater can be worth your time if you leave with nothing more than some valuable feedback, a few pieces of advice, and an introduction or two.

Should you turn down a meeting with someone who doesn’t know your space?  Yes.  Do it in a polite way, but at least probe a bit via email as the meeting is getting scheduled. It might lead the Partner to do a bit of homework and invite a colleague who might be deeper in the space.

This sounds like Sales & Marketing 101 (and also applies to how and to whom you sell your product), but at least once a day I have a conversation with an entrepreneur who tells me about a disappointing meeting at a good venture firm.  When I dig a bit, I often come to the conclusion that he/she met with the wrong Partner.  Had he met with the right Partner, the meeting might have gone really well.  Which leads me to say:

“You gotta sell burgers to meat eaters, my man!”

 

One Response

  1. […] wrote a post a few months ago titled “Sell  Burgers to Meat Eaters,” which highlighted the importance of meeting with investors who know and have demonstrated success […]

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