Talking with Giants: Advice to Entrepreneurs on How to Talk to Potential Investors with Ben Narasin (Part 4)

Before the pandemic, I had an opportunity to sit down with Ben Narasin, Venture Partner of New Enterprise Associates (NEA). NEA is one of the most prolific VC firms in the world, a company that has launched more IPOs than any other. Much of that activity is due to the efforts of Ben Narasin. NEA is a 42-year-old VC firm that at the time of our discussion, had funded over 1000 companies and a world-record-setting 228 IPOs. Those companies include Salesforce, Tableau, Workday and many others. The company is interested in funding technology companies in any sector worldwide. Typically, NEA is looking for exceptional entrepreneurs with big vision and big market potential, to fund companies in Series A and Series B round funding across a wide range of revenue levels. I asked him if he had any tips for entrepreneurs who would like to have their ideas considered by NEA. Here are some of the topics we discussed.

Aligning With Your Investors

Ben talked about making sure that the entrepreneur in the VC are aligned regarding the vision of the business. “I think that the number one thing I would say to entrepreneurs, in general, is be very careful who you raise from and make sure that you are aligned with them in their needs over time.” Since NEA funds entrepreneurs with big vision, it’s important not to look at a VC that doesn’t have that same vision. Ben explained that if an entrepreneur expects that business to grow to $50 million, it would be better to tap into friends and family as a source of funding and keep most of the profit. If, however, an entrepreneur is looking to build $150 million or $5 billion company, that would be better served by large VC firm like NEA. He explained, “Number one is not so much, how do you get to venture, but how do you get to the source of capital that matches your needs over time? Everybody has something inside them that they need to be, and that’s what you want your investors to want, too.”

Introductions

We spent a fair amount of time talking about introductions, as that is such an important part of the funding process. Who provides the introduction to the VC matters, and it’s something that entrepreneurs need to think through in advance of approaching a potential VC partner. It’s important to start off the relationship on the right footing, and an introduction from the wrong person could stall or hinder an entrepreneur’s chances of getting funded. We discussed the value of warm introductions from various sources and how they need to be logical introductions. Ben gave this example: “ If the computer science professor shows you the next fragrance company, you’re like, “Well, okay, but why?” Now, if the answer is, “This is the most tenacious and remarkable person I’ve ever worked with,” then you take that meeting.”

He admitted that university professors can be a good source. Ben has not personally cultivated that network but acknowledge that they could be a valuable source. He commented, “Stanford’s nearby, and there are some phenomenal professors there. I know people respect them enormously and will take their introductions very seriously. And I think that’s smart.”
If possible, get an email introduction from one of their other successful founders, as Ben said, “Ideally, [it’s] someone who knows you, ideally an entrepreneur you’ve funded, who did great.” If it’s not possible to get an introduction from a founder, seek an introduction from someone else that he knows: “The better I know the person and the better I know their expertise, the higher it goes.”
When I asked about getting an introduction from another VC, he said, “One of the things in venture that’s interesting is when one venture capitalist introduces a startup to another venture capitalist, the person on the receiving end always asks, ‘Why?’…If I’m introducing something to a great seed fund, that makes sense because we’re not really that focused on that sector. An angel would be a viable intro to me because they’re only going to do a certain round. Maybe they did the pre-seed or the ‘friends and family,’ and now it’s ready for the next level or it’s ready for the [Series] A. So, I tend to take those reasonably seriously, and the better I know that investor and the better I know their sort of criteria and how they think about the world, [the more seriously I will take that introduction].”

The Email Pitch

If you don’t have someone to introduce you, you can still reach out via email or Linkedin. Ben acknowledged that he does read all the emails that come to him. It is not screened by someone else. However, to be considered, the subject line has to be great. The elevator pitch in the first line needs to be crisp and clear.
In terms of what information to provide in an email, Ben had some very definite ideas about what to include (and what not to include).

  • The Headline/Subject: Because they are very busy and want to know (quickly) that you understand and can explain your business clearly, he’s looking for a very succinct pitch. He explained, “Einstein said, ‘If you can’t explain it simply, you don’t understand it well enough.’ You have to have an elevator pitch. You have to have a one-line elevator pitch that says just simply what you do. If you don’t have that, you’re not ready to pitch anyway. Put that in the subject line.”
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  • The Lead-in: Make it easy for him to read what you are about. Ben posited, “There’s a 99% chance anybody will read the headline (the subject) if I send it to them. There’s then a 90% chance that if I send it to them, they’ll read the first line if I’m pitching you.” Don’t waste time with niceties, as VCs are extremely busy people. He said frankly, “I will tell you what doesn’t work. Long rambling lead-ins. ‘Hi, Ben. I know your time is really valuable and I don’t want to waste it, but I thought you might be interested in…’ All those words are a waste.”
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  • The Deck: Ben advised, “If you think about a great deck or a great explanation of what you do, [it contains] who, what, when, where, why, how, and how much. Who’s doing it? How are you doing it? Why are you doing it? Who’s buying it from you? How much are they paying you? When did you start doing it? That’s about it.”

My interview with Ben covered a multitude of topics. If you’d like to read the other topics we discussed, you can read them here: