Why VCs take meetings
You should never take a meeting with a VC until you've determined whether there is a likely fit between the two of you. Where is the VC in its fund cycle - is it at the beginning of a new fund? Is it about to start raising its next fund? Is this VC raising a fund now, and having difficulty? The answers impact your ability to build an investment syndicate (who wants to co-invest with a lame duck fund?), and suggest how you need to adjust your pitch to fit the circumstances.
If the VC is a generalist (most in Canada are), you may want to adjust your pitch so it focuses more on how the current opportunity is an extension of other industries in which they have had success - for example, pitching enterprise 2.0 as an inevitable extension of current enterprise applications, rather than as a business model discontinuity.
If your VC is focused on your sector, you need to understand where it has already invested in the value chain, and whether your business overlaps with those plays. This VC is not looking for a missionary investment, but for a company that creates real barriers to entry. No "first mover advantage" slide here (in fact, keep that phrase out of all your pitches, please).
The people who do their homework and approach VCs as potential partners are the ones who have consistently better success. Still, many of you take shortcuts, and assume that if a VC agrees to meet with you, it means something. They must know you're a good fit for them, or they wouldn't take the time. Right?
Not so much. Here is a partial list of the other reasons I took meetings when I was a VC:
1. As a reason for getting to know the company's current investors.
2. As a favor for the advisor the startup had hired.
3. To listen to a new view on the addressable market for a business in which we had already invested.
4. To maintain the market perception that my fund was actively seeking new investments.
5. Because the CFO was rumored to look like Bruno Gerussi.
6. It was right after lunch.
7. There were still 45 minutes until lunch.
8. Lunch was being provided.
Many of these meetings resulted in longer term relationships, even if our interest was not in making an investment. Good business development? Yes. But a useful part of your search for near term money? Probably not.
My two cents.