I caught up with Jeff Bussgang at TechCrunch Disrupt a few weeks and interviewed him about his new book Mastering the VC Game. I will post the interview in two parts. In Part 1, Jeff talks about the genesis of the book, his background as founder of UPromise,  how he made it over to the ” Dark Side” of VC, and how and when entrepreneurs should approach VC’s.

SEAN: Ok. So we’re here with Jeff Bussgang. Did I say that right?

JEFF: You did.

SEAN: …from Flybridge Capital Partners, but more importantly the author of the newly debuted book “Mastering the VC Game.” So  Jeff, thanks for taking the time.

JEFF: Yeah, I’m glad to be here.

SEAN: So you guys are… tell me a little about the genesis of the book.  So maybe talk a little bit about your background because I think it’s interesting. Your not only a partner at Flybridge, which is a fairly new, relatively new venture capital firm, but also an entrepreneur having founded  U-Promise .

JEFF: Yeah, yeah, especially here in New York because U-Promise manages the college savings plans in the state of New York.  So it’s pretty well-known here. So I was an entrepreneur for a number of years. As you said, co-founder and President of U-Promise and about seven or eight years ago, switched over to the other side and became a venture capitalist. I joined a couple friends who had been investors for my previous companies to help start this venture capital firm. And I started blogging about venture capital and entrepreneurship about five years ago. Through having seen the entrepreneur side of the table, going over to the other side, and sort of learning what happens inside the black box of the world of venture capital, I started writing about it. And after five years of blogging about it, someone said turn that into a book.

SEAN: Absolutely.

JEFF: So I thought that sounded like a pretty fun idea; a new project that would challenge me. So I went out and interviewed a dozen VC’s and a dozen entrepreneurs, wove in a little bit of my own experience as an entrepreneur and as a VC and wrote the book.

SEAN: Yeah. So you talk a little bit about… obviously the whole goal here is to figure out ..for the entrepreneur to figure out how to navigate through that space which is incredibly interesting and challenging at the same time. The first chapter is sort of dedicated to the VC game, right? Tell us the cliff notes; what are the key take-aways from what an entrepreneur needs to know after reading that first chapter or two, the most important things.

JEFF: What I try to do in the first chapters, I profile entrepreneurs who I think are great entrepreneurs to help entrepreneurs understand what makes a great entrepreneur, a successful entrepreneur. So I profile Reid Hoffman.

SEAN: What are the one or two most important things that entrepreneurs should know about the “VC game?”

JEFF: Well, I would say the first thing is don’t ever cold call VC’s.

SEAN: (chuckles)

JEFF: It’s amazing to me how many entrepreneurs still think that they have a chance of raising money and getting funding  with a cold call.

SEAN: Yeah.

JEFF: You know, people like to invest in people they know and people they trust.  So finding what it is to network to VC’s to get warm introductions from people who know you… You know, venture capitalists are highly networked individuals they have a, as a job description, are very open and plugged in and linked in and if you can’t find a way to get to the right venture capitalist then it says it reflects poorly on you as an entrepreneur.

SEAN: Yeah.

JEFF: And then the second thing I would say to folks is really do your homework and research on who you’re approaching and find their “sweet spot” is as an investor. Because if you’re approaching someone who is a later stage investor or somebody who, if you’re looking to raise a million dollars and somebody’s typical investment size is ten million dollars, you’re just not going to get a very good audience.  And, that could be a real act in frustration.

SEAN: Someone once told me about your former point, “when you need a friend, it’s too late to make one.”  [BOTH LAUGH] So one bit of advice I always give to entrepreneurs is, you know, while you don’t need anybody, get to know people really well because then your barriers are down and you can just have a conversation about what you have in common.

JEFF: Right.

SEAN: But, yeah, by the time you need money, it’s way too l ate.

JEFF: It’s too late.

SEAN: Because now everybody’s wall’s up, right?

JEFF: Yeah, the other line that I use is “the best time to raise money is when you don’t need to raise money.”

SEAN: Exactly. Absolutely right. And to your latter point about, you know, I think everyone just takes this spaghetti approach, right? Throw it against the wall and see– you know, just pitch everybody and see what sticks.

JEFF: Right.

SEAN: Well, I think ultimately you waste a lot of time, waste a lot of other people’s time, and you just look like an idiot because you don’t know who your target audience is.

JEFF: Yeah. I mean, I think when an entrepreneur comes in, they’ve done research on the firm, they’ve done’ research on the partner and their history . They just impress you…

SEAN: Yeah.

JEFF: …                  and their odds go up. I mean, it’s a long odds game.  You know, we see, like many other venture capital firms, thousands of businesses every year and we may  only invest in six to ten at Flybridge Captial.

SEAN: Wow.

JEFF: So the odds are one in three hundred, one in four hundred.

SEAN: Wow.

JEFF: And that’s pretty typical. So people really need to think carefully about targeting as much as they can, tailoring as much as they can of their pitch to the individual they’re pitching.

SEAN: Yeah, absolutely. Is there — and I’m sure this is circumstantial — is there a best time and a worst time to raise money? We just talked about the best time is when you don’t need it, right?…

JEFF: Yeah.

SEAN: … which is a kind of unusual position to be in as an entrepreneur. [chuckles]

JEFF: You know it’s funny I talk a little bit about this in the book and in a blog post I did recently in my blog “Seeing Both Sides,” which is a blog on the industry. And you know there’s a myth out there that VC’s take the summer off…

SEAN: Yes, yes.

JEFF: …and I looked at the data and, at least at Flybridge, we’ve done… looked through the deals by month over our seven or eight years of history, and we’ve done more deals in August than any other month.

SEAN: Wow.