1. Choice of investors: The spectrum of investors includes angels and seed investors, venture capitalists (typically early and mid stage investors), and growth or late stage private equity firms. Each of these groups has its appetite (investment amount), experience, process, stage, and sector focus. Entrepreneurs should do some research on which of these would be the right category and the right partner within that category for their venture.

2. Get an intro: In India, bankers are the norm and a completely acceptable intermediary. Having said that, it’s often not appropriate for truly early stage ventures to be working with a banker. The ideal mechanism for getting to a VC is through networking. Get to them directly at an event or via an introduction from an advisor, a friend, a colleague, or a service provider (like a lawyer, consultant, or accountant). Honestly, I tend to pay more attention to the introduction made by a trusted friend or colleague than something that comes in cold.

3. Stand out: Remember that a VC might get several plans every day. The key really is to be different, but in an outstanding way. Use the first two sentences of the initial paragraph, whether in an email or executive summary, to get the VC’s mindshare. If I am not engaged or hooked in the first two or three sentences, you have lost my attention.

4. Be concise: Follow the 2, 10, 20 rule. Have a two page executive summary, 10-slide PowerPoint presentation, and 20-page business plan. At the early stage, when there is no operating history, often an incomplete team, and a little more than ideation, it’s often a few presentations and face to face interactions that result in an investment. It’s about the gut feeling, than a deep x-sigma analysis.

5. Fine line between persistence and annoyance: It’s ok to follow up if the VC has not responded to your initial email asking for a meeting. There are times, due to travel and the like, when I am unable to get to email for a couple of days by which time 250-300 emails have piled up - and yours may fall through the cracks - and I reply after about a week. Most VCs do make it a point to at least respond to emails. Do not keep pinging every day for about a week to ten days. That is annoying.

6. Get to the point: The email or initial introduction by a trusted party is only the bait to get the initial meeting. The key is to wow the VC in that first meeting. Be on time, prepared to spend no more than an hour (30 minutes and prepared remarks or 30 minutes of Q&A), and get to the point rather than philosophizing or educating the VC on the market for half an hour. Here is the typical flow that I recommend: Problem (what problem are you solving); Solution (how are you solving it or what do you do?); Market (is it a big enough pain point and are people willing to pay for it); Competition (if it’s a big enough pain point, there are others doing it. How are you different?); Business model (how do you sell and make money?); Team (probably the most crucial point; Who is going to execute and make it happen); Financials (how big do you get over what period of time and what are the key metrics for growth); Capital (how much are you looking for and what milestones can you hit with that capital); Exit (do you get bought or go IPO, and when?); Summary (why you?).

7. TTTM: The investment decision is really based on team, technology or differentiation, traction and validation, and market.

8. Cancer drug vs. vitamin: VCs are looking for ‘must haves’ or cancer drugs rather than ‘nice to haves’ or vitamins. Think monumental, not incremental.

9. Definite maybe: VCs are notorious for being in the bucket of ‘definite maybe’ when asked about the interest level in a given startup. We are often afraid of saying ‘no’ for fear of missing out on an interesting deal, yet we tend to fall into the trap of analysis paralysis in order to get to a ‘yes’. The one trigger that gets VCs move fast is a term sheet. As soon as another term sheet is on the table, then VCs get into higher gear to come up with a counter proposal and a potential bidding war can start for a particular startup.

10. The optimum cash continuum, customers ® grants ® beg ® borrow ® steal ® VC: Before approaching a VC, entrepreneurs should know two key facts – taking VC money means letting go of control (and if that’s an issue, then they shouldn’t approach VCs for capital) and VC money is probably the most expensive capital one can get. The best source of cash is high paying marquis customers (revenue), followed by grants. The beg-borrow-steal-VC continuum sounds a little tongue-in-cheek, but the point here is that VC money is not appropriate for most, and the expectations need to be in place as and when you approach the venture capitalists.

Bottom line: When approaching customers, appropriate homework around who to approach, how to approach, what to say or present, and understanding of the process and timelines involved is necessary. Good news is that there is plenty of capital available for outstanding teams with great ideas. Follow the above rules, and you are bound to improve your chances of success.

The author of the article is Mohanjit Jolly, Executive Director, Draper Fisher Jurvetson India.