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14 Tips on How to Sell to Private Equity and Venture Capital Funds

It’s hard enough to raise capital from VC, private equity fund, and family offices. How do you sell to them?

I’m an investor in many companies which sell to these types of clients. I put together a cheat sheet with some of the sales best practices I’ve seen. I thought this would be helpful to two types of companies:

  • Companies which sell directly to private equity/VC funds and family offices, e.g., some of my portfolio companies from my prior VC funds – Addepar, Drop Technologies (Cardify.ai), Earnest Research, Republic, Wonder.
  • The vastly larger universe of B2B companies, many of which have teams focused on pushing VC and private equity funds to evangelize their product to their portfolio.

Thanks to some of our members at PEVCtech for their insights on this research. We are a community for family offices, private equity funds, and VCs focused on using technology and analytics to make better investments in private companies. We share insights on technologies, data, and processes that generate alpha. 

This list is not intended to be an exhaustive guide, but just some ideas that some of the best-performing companies know are exploiting. In roughly descending order of impact, I suggest:

  1. Invest in funds. If you invest, the fund will be evangelizing you to their portfolio and community for the next 5-10 years. A good model for this is Silicon Valley Bank, which has a very active VC fund of funds group. See my list of due diligence questions for VC and private equity funds
  2. Organize a roundtable or dinner strictly focused on your target market. It’s easier to sell to 100 people in your target market in one room, instead of setting up 100 one-on-one meetings. For example, Maestro’s founders partnered with PEVCtech to organize a dinner strictly for Partner/Principals of PE/VC firms. We set up a projector and screen and ran through a complete walkthrough of the product. We controlled exactly who was in the room, so we didn’t buy dinner for anyone who we didn’t deem relevant. Note that this has minimal financial risk, because if we don’t attract a crowd that we both think is worthwhile, we just cancel and the restaurant refunds any deposit. For a list of ideas on recruiting family offices specifically, see 11 Ideas to Organize an Event Family Offices Want to Attend.
  3. Identify and connect funds to investable startups. Jordan Hauer, Co-founder and CEO, Amass Insights, suggested, “Act as an external company scout for free and feed some dealflow to funds. This will highlight your expertise to the funds and keep you top of mind.” However, note this has to be highly targeted or you’re just creating irrelevant emails for the investor to delete. See Where are the deals? How VCs source winning companies.
  4. Identify relevant industry associations to ensure product is aligned and see if there are any relationship-building opportunities. Tim Friedman, CEO, PEStack, and a Venture Partner with Versatile VC, suggests, “E.g., go to the Institutional Limited Partners Association and see their best practices for reporting / ESG / due diligence. See if they have opportunities, e.g., they have a member-only technology vendor database for LP-focused tech.”
  5. Check out the online communities where investors congregate. Many of them are strictly for VCs, but you can ask your VC investors to evangelize for you there. You can also sponsor their events. I list the online communities for VCs in general at Reading list for working in private equity/venture capital. I track specifically the communities for emerging managers at Emerging VC and private equity investors: Accelerators, Platforms, Communities, and Incubators. For other ideas of online communities to join, see How to find the right online communities.
  6. Join the platforms of firms which help tech startups and VCs identify vendors. I list them in the Discounted Services page at Versatile VC. In particular, PEStack helps private equity funds identify the right tech vendors for their needs.
  7. Look for public notice of pain points. Will Jacobsen, Head of Partnerships at TOGGLE AI, observed, “We monitor social media with Sprout Social  to see customer pain points where we know our product can add value. Odds are if you can see that a company’s users are frustrated, they are well aware of the problem and actively open to your unique solution. We primarily monitor Reddit, but also Twitter, Instagram, Facebook and LinkedIn. For example, we look for people mentioning “toggle + I wish” or “IBKR [a competitor] + I wish”.”
  8. Monitor job changes.  Victoria Vessecchia, Sales Director, Grata, suggested, “Leverage social media platforms – like job change alerts via Linkedin Sales Navigator – to monitor target accounts.” 
  9. Look for platform deals. Jim McVeigh, CEO, Cyndx, said, “When a private equity fund announces a platform acquisition, we immediately run a finder search and identify 3-5 bolt-ons. We have very high conversion on outreach emails using this data.”
  10. Leverage targeted advertising. Alex Lukashov, Founder, Fintent, said, “We look at VC/PEs’ portfolio companies, and see what insights our platform has on them. E.g., we could have predicted this or that raise with our CapRaise score X months in advance. Then we put together an article with the examples showing a bunch of similar companies we would have predicted, e.g., “US Series B SaaS Raises”. The next step is to create a social media post with these examples, tagging all relevant VCs/PEs, with a message like ‘Check out intel on your raises and other similar deals we could have helped you predict’. The final stage is to distribute the post via paid Linkedin ads targeting only the relevant VCs/PEs and share the article/messaging via email.”
  11. Tech consultants can sometimes be gatekeepers for access to larger firms. Tim Friedman identifies firms such as Lionpoint, Steelbridge, Holland Mountain, and IVP, plus traditional consultants like EY and KPMG. “They are doing product selection and implementation for larger General Partners and Limited Partners. Even relatively young companies can do this, e.g., Lemonedge in the UK is an early-stage company which has already inked material partnerships.”
  12. Identify and approach key integration partners. For example, Friedman observes that if your product relies on data ingestion, it’s advisable to partner with the likes of Canoe, Alkymi, Accelex, etc., or at least understand how they work. E.g., Addepar (ffVC portfolio company) has a partnership with Canoe.
  13. If you’re marketing to their portfolio companies, make it easy and provide a clear benefit. Micah Mador, Partnerships Manager, Bolster, said in a presentation at the VC Platform Summit, “Investors get hit up ALL THE TIME and everyone wants ‘access to their portfolio’. If you’re essentially asking a VC to do the marketing lift for you, you need to provide some benefit for them doing so. Easiest way and table stakes I’ve found for most is offering a quantifiable perk/discount. Make it easy for them: Give them a forwardable email they can share with a click. Be flexible: Try to not be dogmatic about formality, avoid complex agreements/signed documents. It introduces friction where there shouldn’t be.
  14. If you’re selling professional services, I list further ideas in my essay, deck, and video at How operating executives can work with the private equity and VC industry

Lastly, I have three bonus tips. These are relevant to all B2B sales, but more so in the hard-to-access private equity/venture capital/family office client base:

  1. Win and highlight social proof. Mike Ryan, Founder, Bullet Point Network, emphasizes, “PE and VC firms have a lot of resources, limited time, and need specific solutions. Social proof, including references from other PE/VC Funds, or integrations with existing providers and consultants who are already mapped into their process, are often the key.”   
  2. For ideas on using technology to accelerate B2B sales, see my presentation on How to Make Sales as Easy as Online Dating.  I also wrote the first book about using online networks for professional sales, deal sourcing, and capital-raising: The Virtual Handshake: Opening Doors and Closing Deals Online. You can buy it here and read the entire PDF here.
  3. “Keep the pricing model simple”, advises Rick Kushel, General Partner, FINTOP Capital. Complex pricing creates friction in the sales process which delays outcomes.” 

Further reading:

Disclosure: David Teten is an Advisor to Bullet Point Network. This was cross-posted on Integrity Research’s blog.

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