As a startup, it's tempting to believe that with a little investment you'd have a much easier time establishing partnerships with companies or acquiring business customers. The fact of the matter is that it's not always the case.  Yes, money makes it easier to hire the right people who have relationships you can leverage, and it does provide some degree of credibility.  However, if you're targeting a risk-averse customer base it's unlikely you can pick up the phone and close deals just because some VC firm put money in the bank.  A risk averse target market still wants to see market validation and a sustainable business. They still want to see others take the risk before they jump on board.  And, you're still going to have to do that cold-calling we all love so much.

Keep your eye out for an earlier adopter - a company with a proven track record of adopting non-standard solutions.   

What is a VAR
A VAR is a value added reseller, someone who pushes your product out to the buyer and, in exchange, takes a percentage of the sale.  The higher the sales price and the more support services the VAR can provide to the buyer as a result of your product (for example, customization or integration), the more interested the VAR is in working with your company.

The upside of turning to a VAR is that you can speed up your sales cycle by tapping into well-networked resources (a big plus if you’re young or don’t have connections in your target market).  

VARs tend to be well networked within a specific area (for example, the Bay Area or Los Angeles) rather than nationally networked, tend to be small companies or outfits, and may offer customized development (generally, this is not something to be scared of. They do sign NDAs and most of the development is less innovative and more on-demand.)

Ways to Get to VARs:

Convincing VARs to Work With Your Company:
Sam Jadallah, a VC at Mohr, Davidow Ventures and one of the architects of the VAR channel, gave my co-founder the following advice about how to get a VAR to work with you when you have limited resources:

The best way is to convince a VAR that it has something to gain and nothing to lose by working with your company is to: tell the VAR that it will get a share of the sales commission, a contract for any integration work and, in return, the only thing you want is a couple introductions to accounts that have been dormant (meaning: you will do all the sales work, but the VAR will provide you with the contacts to accounts that it has not received revenue from in some time.). If your product sells and can demonstrate the benefits of a partnership, you’ll be able to re-negotiate a more favorable agreement from a position of power.

Footnotes
1. Professional Organizations & VARs

This strategy worked best for our team: We researched the websites of non-profit, professional organizations for resources that our buyers might turn  to(ex: databases containing products and/or services), such as http://www.alanet.org/vendors.html. Then clicked the links of the service providers (in this example, it would be Computer support services, Computer training services, etc). If a reseller looked like it would be a good fit, I searched job postings by the VAR at my University.  Maybe it was my lucky day but, low and behold, one of the two biggest VARs in our space was recruiting and had contact information available. I dropped an email. The next morning the owner of the company called me to suggest we meet in San Francisco the following week!

I wish someone told me this a while ago, because it's one of those things that makes you go "doh" once you figure it out. I found our early adopter at the most obvious place of all, and truely had no clue until I sat down with him for a drink - he liked talking about technology & so did I.

 My company sells technology to a typically technology resistant market, go figure.  I went to an industry conference and, since I was exploring porting our product onto the Blackberry, strolled over to a talk about about Blackberry solutions in my space.  The talk was rated as being very technical, but the person who was leading it had the following characteristics:

1. Beta tester of products
2. On the edge of implementation (ex: has rolled out Instant Messaging software for communication w/ clients, has a 2 panel display for all employees!)
3. Most certainly could kick my ass when discussing any sort of technology (which does not mean much, to be frank)
4. A former consultant & entrepreneur
   
5. Male (not sure if that  makes a difference)

So now that I've said it, you probably are thinking "that's obvious." It sure sounds like it but finding those people is hard so my advice to you is go to educational conference where people (hopefully the buyer) is presenting to other buyers in his/her industry, industry conferences attended by the buyer, etc.

What Influences The Sales Cycle:

1. Department Budget
2. Firm Culture
3. Openness to adoption of new products
4. Who controls the purchasing process? (Is the purchaser the end user?)
   
5. How bad is the pain? (The worse the pain the quicker the sale)
6. Holidays
7. Economy

Think about the personality of the founding team before you tackle an industry - it really does matter!  Some key components to consider are:

1. Sales Cycle vs. Each Team Member's Exit Time Frame
   
2. Exit Valuation  vs. Each Team Member's Required Exit to make it worth while (opportunity costs; one venture vs. another)

Our team is really starting to learn this lesson and it's not an easy one:
Before we started selling, we met with several key players in the space and other software entrepreneurs to learn about how the sales cycle worked in our industry.  One key message we got was, "the sales cycle is long."  Naturally, we thought we would be able to make the sales cycle faster because we would network well, be persistant and, among other things, work hard.  We've done all of these things in excess, yet we're wondering why we didn't listen.

Long sales cycles are frustrating.  Since we outsource a bulk of our development, we don't have enough work to stay busy all the time, want to see signs of success (monetary) and we're bootstrapping operations, which means cash is very low. For some of the team, dealing w/ the difficulty of a long sales cycle is a lot easier than others.  For example, a member of our team needs frequent rewards to stay motivated and keep going.  W/ a long sales cycle these rewards may not be present.  So, make sure you reflect on how well the people on your team matched the industry you're going take on.