After attending TechCrunch Early Stage last week, I was cheered to meet so many first-time founders and experienced investors who are looking for opportunities. Based on my conversations, VCs are very open to working with novices who can show that they understand the market in which they hope to compete.

But deal-making is idiosyncratic: A few investors might be content to make a deal over coffee, but early-stage teams still need a sturdy pitch deck or memo they can leave behind. Similarly, one VC may encourage newly minted CEOs to eat ramen and ride the bus, while another might suggest a salary in the low six figures, depending on geography.

I asked five early-stage investors to share frank advice for first-timers, and I’m going to save you some time: Many (if not most) of you are probably not ready to pitch an investor.

If you haven’t already spoken to scores of customers or created a contact spreadsheet with at least 25 investors who’ve backed companies like yours, it’s too soon. And if you’ve added “AI” to your pitch deck only to make it more appealing, here’s some more bad news: FOMO is passé, and due diligence is the new black.

In keeping with our format, these VCs explain what kinds of deals they’re looking for, how they prefer to be approached, along with some straight talk about bull-market fundraising techniques that no longer apply today. Their answers were edited for length and clarity.

Thanks very much to everyone who took the time to respond! If you’re an early-stage investor who’d like to be included in future columns, email guestcolumns@techcrunch.com with “How to pitch me” in the subject line.

Here’s who participated this month:

• Rudina Seseri, founder and managing partner, Glasswing Ventures
• Patrick Salyer, partner, Mayfield Fund
• Josh Constine, venture partner, SignalFire
• Alexa von Tobel, managing partner, Inspired Capital
• Oren Yunger, partner, GGV Capital
  

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Rudina Seseri, founder and managing partner, Glasswing Ventures

What kind of opportunities are you looking for in April 2023?

This year has seen massive attention paid to AI, specifically generative AI. Still, the fact of the matter is the current attention only covers a fraction of the full breadth of the opportunity. AI is far broader than the buzz would even imply! We invest in startups leveraging the immense breadth of AI to solve critical business problems.

Specifically, we are spending time developing our theses around and seeking founders building the next generation of cloud/computing infrastructure, industry 4.0 and intelligent verticals, the augmentation and automation of software development, and applications and infrastructure around generative AI.

Many workers who’ve been laid off recently are thinking about starting up their own companies. What’s one important thing they should know before pitching investors for the first time?

We look for founders to demonstrate how to apply the right techniques, with the right data, to the right problem. Just saying your product is AI-driven will not cut it. You can expect that we will go deep into understanding your technical approach and product differentiation.

From a general perspective, in your initial meeting with an investor, you must communicate why the problem you are tackling needs to be solved and why you are the right person/people to solve it. A compelling way to do so is via the business’ origin story. This should include how you identified the problem, the value of a solution and why your team is uniquely positioned to solve it.

Additionally, upon raising early-stage capital, your first job will be to hire top-notch employees. Your ability to “sell” a compelling opportunity to join your business is a vital founder characteristic.

How do you prefer to be approached with an initial pitch: a cold email, a warm intro or another method?

A warm intro, particularly through a founder or colleague, is almost always the best way to connect with an investor. If you cannot find a warm introduction to an investor who is proactively seeking to fund outstanding entrepreneurs, how are you going to win customers who are inundated with vendors seeking their business?

That said, I review everything in my inbox and can be reached at rudina@glasswing.vc. Also, remember to be intentional in your outreach, as it will save us both time in identifying if there is a potential fit.

How much salary should the CEO of a pre-revenue startup take? Would you back a founder who has a second job?

It is difficult to quote a specific number for salary, as that is a combination of the level of financing the company has raised, the experience of the CEO and their financial obligations.

Most importantly, the compensation of a startup CEO should be a holistic conversation between the board (often your lead investor acting in their capacity as a board director) and the CEO. Trust, respect and transparency must exist such that the conversation can happen. The wrong approach to compensation is to name a specific number without context.

Being a founder is an intense job; it’s all-consuming and often equates to having 1.5 to 2 jobs, so the notion that you can do it part time is just not realistic. We expect a founder to be full time on what they are building at the time of investment.

But, of course, part of my job as a board director and investor is making it feasible, as it is essential for maximizing the business’ success. Building a company is a full-time (and then some) pursuit.

What’s one traditional fundraising tactic founders should remove from their toolkit — something that no longer works but is still a common practice?

I still frequently receive inbound requests from founders who are either out of strategy for my firm or who do not effectively communicate the opportunity to work together convincingly. There are more venture funds than ever and increasingly more specialized funds. Before reaching out to a prospective investor, diligence is critical because today, more than ever, there is likely a firm that is an excellent fit for what you are building.

Notably, this goes both ways. When we reach out to a founder of potential interest, we hold ourselves to the bar of being thoughtful, prepared and able to articulate to a founder why we believe there is a potentially valuable opportunity for us to work together.

Are pitch decks still necessary? Have you ever signed a term sheet without reviewing a deck first?

Even at the first-capital-in stage at which we invest, where a company is pre-revenue and often pre-product, a pitch deck is valuable in guiding the conversation and serving as reference material in the diligence process. In addition, building and iterating on an effective fundraising deck can serve as a framework for thinking and addressing important questions in the early days of a business.

With that in mind, I have never issued a term sheet without a presentation of some form outside of an incubation. As incubating investors, this is part of the company formation and ideation phase of the business. Many of the questions that are part of creating a fundraising deck are developed and addressed alongside a founder.

Tell us about the best pitch you’ve received recently: At what point did you realize you were going to invest?

One pitch that comes to mind is my first meeting with Thouheed Gaffoor, co-founder and CEO of Basetwo. In meeting Thouheed and each member of his founding team, what stood out was the high level of credibility and domain expertise.

As part of our diligence process for every investment, we speak to dozens and dozens of end customers regarding the potential of investment, both users and budget owners. We knew we wanted to invest in Basetwo when, in the case of those prospective customers, they started asking us when they could get their hands on the platform.

Please share one piece of advice that can help a first-time founder stand out from the rest.

Do not be afraid to say “I do not know” when asked a question by an investor. In the early days of building a business, there are, by its nature, questions for which the answer is unknown. Part of business building is answering those questions.

One of my favorite answers to receive is, “I do not know, but I am going to find out by…”. If you provide a thoughtful answer for how you will answer an unknown, and that unknown is stage appropriate, a good investor will not fault you and should appreciate and value your response.

What are you reading/watching/listening to right now?

I am currently rereading the Foundation series by Isaac Asimov. It frequently reads as a timely commentary on the challenges of the day despite being published in the 1950s. One of the series’ key themes is social change, specifically how it is predicted and controlled and the role of technology.

Asimov raises important questions about social and political upheaval that are equally applicable today in the real world as in the fictional world.

Patrick Salyer, partner, Mayfield Fund

What kind of opportunities are you looking for in April 2023?

We are actively looking to lead new enterprise software investments, at both inception and Series A stages. Some areas we are excited about include artificial intelligence, data, dev tools, security [and] fintech, among other areas. Also, we invest across all parts of the enterprise stack, including applications, middleware and infrastructure companies.

Many workers who’ve been laid off recently are thinking about starting up their own companies. What’s one important thing they should know before pitching investors for the first time?

Before pitching investors, founders should talk to customers — not just a handful but tens or hundreds of customers. This will provide all the context, clarity and conviction required to speak to investors.

How do you prefer to be approached with an initial pitch: a cold email, a warm intro or another method?

As a former enterprise software CEO-turned-VC, I have a tremendous amount of respect for well-executed cold email outreach and welcome it. That being said, in Sales 101, what converts even higher than cold outreach is a warm intro, so that always is a better route (but not required)!