4 ms·

Only works at later stages, as far as I know (as an early stage investor). I don't know any early stage VCs who would take a company intro from a banker. Edit:

by ghc 5y ago

Only works at later stages, as far as I know (as an early stage investor). I don't know any early stage VCs who would take a company intro from a banker. Edit: Not that early stage companies don't hire bankers. Checking my email, I have received 43 "investment opportunity" emails from bankers in the past week. Due to the sheer volume I never take cold intros, ever. Nearly 100% of the intros I take come from other VCs, angel investors, board members, and founders I have relationships with. The ONE exception is when a founder who has done their research contacts me with a concise, relevant message.

airstrike 5y ago
Every company is different, which is why I worded my comment as "happy to see if I can help". I interpreted GP's case to mean he is a founder looking to find 20-30 investors, which would require a banker that probably already has at least half of those contacts. I'm not suggesting that as a banker I'd be making cold calls into investors – although we might, depending on the opportunity. The more likely approach is to call those funds that I or my colleagues have relationships with from previous transactions.
- ghc 5y ago
  I think GP is just referencing the article because it seems daunting to many founders to "know" 20-30 quality investors. The investor who wrote this piece is a well known seed stage investor, so when he says "meet with 20-30 investors" he's talking about a seed stage raise of around $2-7MM. In my experience the reality is you need probably 4-5 solid intros to get to 20-30 meetings, because investors love to pass deals around to other investors. Out of curiosity: how much would an investment banker charge to a company to get 20-30 intros to quality investors, assuming it's bankers who have relationships with investors established through M&A or as LPs? I've never seen it, but I also realize that doesn't mean it doesn't happen :).
  - airstrike 5y ago
    You're exactly right. I'm afraid I'm guilty of commenting before even reading the article, sorry. Bankers aren't usually involved at the very early / seed rounds. I have traditionally worked on M&A transactions rather than capital raises, but to answer your question fees are usually determined as a % of the amount raised, subject to a minimum—which again is why it only makes it economical to hire a banker at later stages. Generally we look to precedent fees as a general guideline and then negotiate from there with the client depending on specifics.

by ghc 5y ago

airstrike 5y ago

Every company is different, which is why I worded my comment as "happy to see if I can help". I interpreted GP's case to mean he is a founder looking to find 20-30 investors, which would require a banker that probably already has at least half of those contacts. I'm not suggesting that as a banker I'd be making cold calls into investors – although we might, depending on the opportunity. The more likely approach is to call those funds that I or my colleagues have relationships with from previous transactions.

ghc 5y ago
I think GP is just referencing the article because it seems daunting to many founders to "know" 20-30 quality investors. The investor who wrote this piece is a well known seed stage investor, so when he says "meet with 20-30 investors" he's talking about a seed stage raise of around $2-7MM. In my experience the reality is you need probably 4-5 solid intros to get to 20-30 meetings, because investors love to pass deals around to other investors. Out of curiosity: how much would an investment banker charge to a company to get 20-30 intros to quality investors, assuming it's bankers who have relationships with investors established through M&A or as LPs? I've never seen it, but I also realize that doesn't mean it doesn't happen :).
- airstrike 5y ago
  You're exactly right. I'm afraid I'm guilty of commenting before even reading the article, sorry. Bankers aren't usually involved at the very early / seed rounds. I have traditionally worked on M&A transactions rather than capital raises, but to answer your question fees are usually determined as a % of the amount raised, subject to a minimum—which again is why it only makes it economical to hire a banker at later stages. Generally we look to precedent fees as a general guideline and then negotiate from there with the client depending on specifics.