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OCV Public Handbook/💰Fundraising/🪢How to Interact with VCs

How to Interact with VCs

Engaging with other venture capitalists (VCs) is an important aspect of building a strong and supportive ecosystem for OCV companies. Below outlines how OCV engages with our VC partners.

VC / investor tiers

  1. Test VC Group: OCV’s strongest supporters. OCV companies should feel free to test their pitches with this group. Test VC Group is a subset of the “Friendly VC Group”.
  1. Friendly VC Group: Those who have invested in OCV companies in the past and/or demonstrated an understanding and appreciation for OCV’s model. They are on our mailing list along with the Test VC Group.
    1. Friendly VCs will be introduced to OCV companies one quarter prior to others.
  1. Pipeline VC Group: VCs who are new to us and are looking at one company for investment for now. They may graduate to the “Friendly” group.
    1. Founders are welcome to nominate VCs in their own networks and / or those who have expressed an interest in investing in the company. OCV will add these firms to the Pipeline group.
  1. Deny VC Group: those we have had challenges working with in the past or who have a mixed reputation.
      • Example behaviors: bypassing OCV introduction process (i.e. reaching out to companies out of process; not a value add; suggesting founders to renegotiate equity; not honoring term sheets; last minute demands)
OCV will maintain and provide our Founders access to the file: “OCV - Partner VCs List”. OCV Founders can request access by contacting the Business Ops team. OCV will make email introductions to Friendly VCs once founders reviewed their pitch decks with OCV.

Investor Newsletter

If investors are showing early interest in your company but it isn’t time to begin the fundraising process (see advice on fundraising activities), you can keep potential investors “warm” by sending a monthly investor newsletter. This option won’t be right for every company. Only consider this option if:
  1. You are 100% committed to sending the newsletter on a regular monthly cadance. Sending the newsletter at irregular intervals is a bad signal to send to investors.
  1. There’s high confidence in being able to show company momentum and growth month over month.
The newsletter should be sent via email to potential investors and all team members. Focus the content of the newsletter on showing month over month progress. High-level, the content of the newsletter should focus on:
  1. Three highlights showing what you achieved the month prior.
  1. Three ambitions explaining what you aspire to achieve in the upcoming month.
  1. One ask to investors for something you need help with. Investors understand you are vetting them as much as they are vetting you. Good, interested investors will offer to help before investing in you.
  1. Consider including ARR growth, burn rate, and runway.
See “How we GitLab keep investors in the loop” for inspiration and template ideas.

OCV investor engagement process

  1. Drive awareness of OCV processes such as when OCV will facilitate an introduction to the Company CEO (see Post-CEO #6 at
    🎗️
    OCV Support Scope    )
  1. Maintain relationships with Friendly + Pipeline VCs
    1. Quarterly newsletter [to be implemented for Q4 2023]
      1. Present new OCV companies
      2. Highlight milestones at existing companies
      3. Spotlight one pre-CEO company
      4. List companies currently fundraising
    2. Quarterly call / check-ins with Friendly VC Group
Note: OCV companies wouldn’t need to send out investor updates independently prior to Seed round.

Typical fundraise timeline

To maximize founder time spent on fundraising activities. We recommend the following process/timeline:
Week 1: Review pitch with OCV and iterate
Week 2: Review pitch with Friendly VCs and iterate
Week 3: First calls: may not be with a General Partner at a venture firm
Week 4: Second calls: with a General Partner, cut a few firms if too many
Week 5: Third calls: with the General Partner again, cut a few firms if too many
Week 6: Full partner meetings (these are usually scheduled for Monday mornings)
Week 7: Full partner meetings and term sheets due Tuesday noon Pacific
Also see tips at
🗓️
Investor Meetings.

GP due diligence call requests

OCV's GP is available for a due diligence call if required by the lead Seed investor. As this is expected to be the final step before extending a term sheet, the number of GP call requests should not exceed 2-3 firms for each OCV company. We look to OCV CEOs to manage this expectation with potential investors who request GP calls.
 
To schedule a GP due diligence call, CEOs can make an introduction via email, copy the GP's PA for calendaring, and OCV's Business Ops Team for visibility.