A Forbes article from a few months ago has been circulating around the office called “Why Do VC’s Cold Call?” The article is written from an Entrepreneur’s perspective (his name is Steven Rosenbaum), and essentially concludes that cold calling has no place in the VC-startup relationship.

From our perspective here at OpenView, this couldn’t be further from the truth. Cold calling is certainly not the only way VCs fund companies, and I’m sure there are many VCs who rely solely on their partners’ connections for their deal flow. But there are also plenty of VCs that do source deals by cold calling entrepreneurs, and neither those VCs or the entrepreneurs they invest in are any less successful.

To make his point, Rosenbaum gave five reasons not to take cold calls from VCs. I’ll respond in order:

1) They won’t invest in you—ever

OpenView’s investment team does a fair amount of cold calling. We invest globally, and don’t have the global network or the big-time name (yet) to have deals just fall into our lap. When I asked my MD how many of our 20 portfolio companies we cold called at some point prior to making an investment, he simply told me “all of them.”

Rosenbaum wants VCs to have a warm introduction before reaching out to a company, but from our perspective it’s the exact opposite — when one of our partners goes into a conversation with a CEO, we usually want to have done our homework to understand their business model, need for capital, and vision for the future. Those are details that won’t necessarily be found on a company’s website.

2) The person calling you is a summer intern

In OpenView’s case it’s usually an Analyst or Associate from our investment team, but to his point, it is usually a junior person at the firm.

So what?

If there’s a fit, it will quickly escalate to a partner. The partners work closely with our analysts and associates, respect their judgment, and don’t discriminate against companies that were sourced by a junior team member in favor of their own connections. Why else would we bother employing them?

3) They haven’t done their homework

Sometimes this might be true. If you clearly state on your website that you’re a consumer-oriented company, and one of our analysts calls you, you’re right to be annoyed that they didn’t do their homework and are wasting your time (we focus on B2B). But we also have a minimum revenue requirement, which probably isn’t posted on your website. In this case, calling you to find out if you meet our criteria is the analyst doing their homework. And even if you don’t yet meet the requirement, it’s worthwhile for both parties to develop a relationship, so that when you do have $2 million in sales and are looking to raise capital, you know who to call.

4) The data you share isn’t confidential, or worse (the VC will share it with your competitors)

Perhaps there are some VCs who have ulterior motives when calling into companies, but OpenView’s investment team is pretty busy finding investment prospects. Any market research we do for our portfolio is executed by OpenView Labs, our consulting arm, out of a separate office down the street from our investment team. We’re extremely transparent about why we’re calling you, and we wouldn’t do that sort of shady project even if one of our portfolio CEOs asked us to.

5) If it’s the right firm for you — it’s the wrong door

Even if you’re interested in the firm, Rosenbaum suggests hanging up on the associate and reaching out to the partner. While this might still work, I think it would actually hurt your chances of receiving an investment from us. That’s because an associate who’s psyched about your company will be a great ally during the funding process. But even if you did go over their head and reached out directly to a partner, the cold call was a success — it made you aware of our firm and the fact we’re interested in learning more about you.

*****

That, in a nutshell, is why we cold-call: to open up a conversation.

Sometimes it leads to an investment, sometimes it doesn’t, but the chance that a ten-minute investment of your time could result in a multi-million dollar, multi-year partnership is well worth the price of admission.

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