This post caught my attention on how entrepreneurs should handle unsolicited inbound fishing expeditions from VCs. Manu Kumar of micro-VC fund K9 Ventures writes about instances where an individual at a VC firm requests a phone conference with one of his portfolio companies in order to hear the entrepreneur’s views on the sector.

To cut straight to the conclusion, he suggests to not waste any time in responding to most of such inquiries. In an effort to gain market intelligence, VC firms often task junior hires, sometimes college interns, to amass information on a space by surveying experts: who better a resource to tap than startup founders in the given space? They’re casting a wide net over the market in order to build a knowledge base from the best practitioners in an emerging field.

Serving as a free consultant for some junior associate at a VC firm that has a brand name attached to it does nothing for you — other than perhaps stroke your ego that a brand-name firm was interested in your fledgling startup.

– Manu Kumar, K9 Ventures

I believe Kumar’s advice is directionally accurate, certainly for startups in North America. In the cases where the inquiry is coming from an overseas VC — it’s more often a North American VC practice anyway — and the entrepreneur is foreign, however, I would offer a slightly different take.

For entrepreneurs with relatively light international experience — and I encounter several outstanding individuals in both Europe and Japan in this situation — I often recommend that they accept one or two such solicitations from VCs outside of their home market in order to hone their pitch and sharpen their game.

However, as Kumar rightly points out, time is an entrepreneur’s most precious asset. Such conference calls should be properly qualified and prepared to ensure an efficient and mutually beneficial exchange. Here are a few tips I give to my portfolio companies:

1. Qualify the inquiring person first. Kumar offers some suggestions on how best to do so. Understanding the source of the inquiry will give you some indication on how much credence to give it. If it comes from a decision-maker or the VC partner who sits on the board of a highly complementary portfolio company, the inquiry may be seriously genuine and warrant responding quickly. [Note: Kumar also warns to beware of VC “Partners” in title only; one litmus test is the VC’s number of board seats.]
2. Time-box the call and manage the clock. 30 minutes is often ideal, and one hour should be a maximum.
3. Make your pitch and any answers to their inquiries as concise as possible. Make sure you leave time to ask questions. Take control of the conversation assertively by the 20-minute mark if necessary.
4. This means that you should prepare some questions for the inquisitive VC in advance. What are their views on your sector through the lens of an investor? Who in their opinion are the most innovative players? What is their thesis on the winning strategy? Where do they believe the ultimate exit avenue could lie?
5. Think of this as an opportunity to learn from someone who, by brute force if not by way of any special expertise, will likely possess some context about your sector that you may not have. I’ve even known clever founders to persuade the VC to send over their firm’s in-house analysis of the space (in the spirit of knowledge sharing).
6. Once you recognize the VC’s agenda, don’t hold it against them. The person is simply doing his/her job, even if your respective goals don’t match. Moreover, they could be a resource for you at some point in the future.
7. A word of warning, the inquiring VC firm may be already actively pursuing an investment in your sector and is simply attempting to glean competitive intelligence. While you cannot judge with certainty the veracity of their answer, it’s worth asking them point blank if they are before scheduling the call. Most VCs act with integrity, and all rely on their reputations.