Can we please normalize sending a deck first, and having a coffee later?

Hello, long time no see!

Today's short piece may be controversial but hey, that's how it works! I hope it can help foreigners to have a better understanding of why the Brazilian tech ecosystem behaves the way it is when it comes to founders in fundraising and Venture Capitalists making up their minds.

The Communication Code

Early-stage investing is mostly about people, and when it comes to Brazilians, we can't ignore some cultural patterns inherited from our Colonial Past.  In the 1930s, Mr. Sergio Buarque de Holanda analyzed Brazilian culture in-depth in his book, "Roots of Brazil." He's known as one of the many intellectuals who sought to understand and explain our society.

Using the Latin notion of cor (heart), Holanda argues that the biggest obstacle to modernizing the country is the way in which Brazilians support themselves through personal relationships and distrust of official spheres. His argument brings to mind the common Brazilian proverb, “For my friends, everything; for my enemies, the law.”

Although some locals might disagree, I believe most of us are to some degree natively "embedded" with Holanda's Brazilian personality: sensual, cunning, cheerful, creative, hospitable, friendly, and cordial. Thus, it explains why our dialogues, writings, and social environments are contaminated with an aversion to strict formalities and ceremonies.  

Once you realize this, then it makes a lot more sense why we avoid being straightforward in certain contexts when delivering unpleasant feedback. For instance, this pattern varies from small daily things such as saying "maybe another time" instead of "no" to a coworker that has invited you for a coffee to a larger, data-backed decision, such as passing on an investment opportunity via email.

Often, local VCs have a library of "passing templates" in which the wording softens the fact that they're not interested. Otherwise, most founders would get very upset if they received a straight "it is not something we would do here," without any sort of feedback.

But what if the deal didn't make sense at the time for the investor? Would you rather (I) a genuine "fast no" or (II) a delayed, "fancy no" from a templated email? In my investment career, it seems Brazil is home to the second option whereas anywhere else in the world, founders aim for the first option and once they get it, they move faster to the next meeting until they close their round. 

Don't Hate the Player, Hate the Game

Oftentimes, founders (especially first-timers) aren't helping themselves in this context either. Their cordiality appears when they try to set up a call with a prospective investor before sharing their pitch deck or, even worse, finding time for a coffee/lunch/whatever before sharing it.

This approach is detrimental to fundraising, and here is where I finish my point. Founders, bear in mind that in the VC land (unscalable, small teams, low-tech, and boutique) there's always a larger volume of deal flow than one partner/associate/principal/analyst can process. 

Feed prospective investors with information about your company (send your deck!), then you seduce them in a call or an in-person meeting (such as a coffee, lunch, dinner, or a visit to the firm), but never the other way around. Keep them posted with your company's latest updates and work towards becoming a thought leader in the problem that you are committed to solving. 

So, if you choose to build a tech fast-growing company, you must learn how to play the staged financing game. Always remember that, historically, the best VC deals and the best investors always show up when you are not seeking money! 

Coming Soon: 10 unpopular fundraising tips for first-time founders.