With a competitive marketplace, new technology companies may find that they need more capital to accelerate their company’s growth. The question becomes how to effectively approach investors outside the company’s geographical market. At FoleyTECH Chicago 2016, Liam Donohue, co‑founder and managing partner of Boston-based .406 Ventures; Ned Schwartz, partner of Ohio‑based Drive Capital; Tasha Seitz, the chief investment officer of Impact Engine, a Chicago venture capital firm; and Joshua Siegel, the general partner of Rubicon Venture Capital, a firm with ties to both the East Coast and the West Coast, discussed the finer points of fundraising from coast to coast. Below are a few of their tips.

What Investors Are Looking for from You

As can be expected, your target investor’s appetite for risk may vary depending on where the fund is located, and it’s important to keep this in mind as you travel from coast to coast. Additionally, different geographical regions may have different expectations for their investment: the Chicago market may be more conservative, with a large focus on your company’s revenues. East Coast venture capitalists are more likely to require certain milestone events before they’ll invest, while the West Coast market, with a wealth of investors, may be less concerned with this. Regardless of where you’re seeking capital, you should keep the following tips in mind:

• Be sure you choose your pitch person carefully. The ability to clearly communicate your product, target market, and potential for growth is critical to obtaining capital, regardless of where you’re seeking investors.

• Drive the conversation forward, but don’t rely solely on your pitch deck when you’re in front of your potential investors. Be ready to truthfully answer the questions your potential investors may ask.

• Don’t over-promise or promote what you think your company can achieve. Stick to the facts, and be sure to mention the material you think is most critical for your investors to hear.

• Sell the market dynamics of your company’s current location. For example, if you’re based in Chicago and seeking capital on the coasts, highlight why the Chicago market is viable for your company: there’s broad customer base for your service or product; the cost of building a business is relatively cheap when compared to the cost of developing a business in Silicon Valley; key employees are more likely to stay with the company longer because the competition is likely less fierce than in Silicon Valley.

Position Your Company to New Investors for Additional Capital

Leverage your existing network to obtain introductions to venture capitalists in different geographical markets. Once you have arranged the introduction and initial meeting, be sure to use your time valuably. Additionally, be sure you can explain why you’re seeking capital outside of your geographic market as many investors will want to know why you’re not seeking local capital. If you don’t have an answer ready for this, some investors may assume an investment was deemed too risky by the local market. Here are a few key tips to keep in mind:

• Consider the growth needs of your company and whether you actually need to seek capital at this stage. Don’t waste time chasing investments if you already have the capital on hand and could further develop your product and customer base.

• Do your due diligence on your potential investors before you make your pitch to be sure you’re seeking appropriate investors for your product and to be sure your target investor is a good fit for your company. For example, if you’re a tech company, don’t waste time chasing investors who only invest in healthcare products. Similarly, be aware of the types of investments your target venture capitalist is willing to make: if you’re entering a Series Seed round, it may not make sense to target investors who only work with late-stage companies.

• Along these same lines, don’t ask your investors questions about their company that you could find the answers to simply by looking. While it is important to diligence the venture firm or investor, don’t waste the pitch time they’ve given you by asking questions that you should be able to answer simply by doing a little research.

• Don’t underestimate the value of experience—reach out to other entrepreneurs who have previously worked with your potential venture capitalist to get an idea of what to expect—good, bad, and ugly.

Final Tips  

If your target investor ultimately chooses not to invest or it is clear from the pitch that it is not a good investment fit, ask for feedback on your presentation so you understand how to improve for future pitches, and keep the investor apprised of your company’s growth. While an investor may initially say “no” to investing in your company, that same investor could become an ally for your company in terms of making future introductions or investing in a later round. Remember that the venture capital market is a relatively small industry, and word travels fast: a particularly bad first impression could significantly impede your ability to find capital in the future.