You’ve got your idea. Your concept has been validated. Early adopters are onboarding and dishing the feedback you’re craving to make this the best possible product. You know with a little extra cash, you could hire the right talent and actually have a marketing budget to go from startup to sustainable business.
Before you walk into the room asking for the financial support to get you standing on two solid feet, it’s imperative to ensure you’re prepared.
So what exactly are VC’s looking for?
Dan Gawronski of the Venture Best Group at Michael Best & Friedrich LLP works with early stage startups providing a variety of resources. From leveraging additional insight on the market or connecting startups with other industry experts, to learning how to place a realistic value on your company at it’s current stage. Simply, to ensure the business is considering all facets of their product and industry prior to walking in the room with the check-writers.
Here are a couple tips he passed along:
- ‘A’ Teams Hold The True Value
“Every startup puts so much emphasis into their idea (thinking their idea/secret sauce is the next big thing), but most VCs evaluate companies based on their team. We firmly believe that an A team with a B idea will find better success than a B Team with an A Idea. VCs want to know the co-founders have prior experience of both startups and success.”
- Funds Have Life Cycles
“Entrepreneurs need to realize that the dollars they ask VCs need to fit the fund, or they need to show VCs what type of investors will invest in follow up rounds. Funds have life cycles that entrepreneurs need to understand the timing of.”
Know Your Product and Know Yourselves
Get to know your competitor’s product so well that you can nearly guess their next move. Understand what they’re offering, from the product to their brand, and how you’re different. Don’t tell us, show us. Prove to your early adopters and customers that you’ve truly set yourselves apart from the rest through your customer support and features.
Additionally, what’s the big picture? What are you ultimately attempting to accomplish with what you’re offering to the masses? It’s so easy to get caught up in the right now and the time-sensitive tasks, that we can lose sight of what we’re really trying to do in the grand scheme of things. Ask yourself, ‘could this potentially be used to serve another market?” “What other players are in that space and is the sand box big enough for us to enter as well?” Investors will love that you’ve thought about the longevity of the product, and how after you’ve claimed and controlled one market, there’s additional potential to utilize pre-existing technology in new ways to ultimately lead them to their desired ROI.
Practice, Practice, Practice
Getting yourself out there early and often when you have a validated product that’s gaining traction, is a great way to not only perfect your pitch, but to also spread the word.
When you can’t make it to an event, try GoPitch:
- Every startup gets 35 seconds to record their pitch
- Once submitted, other users provide feedback/insight on pitch and concept
- Search by ‘Most Popular’, ‘Plays’, ‘Recent’ to hear and learn from other pitches
- It’s Free
Just like your product, obtaining feedback on your pitches will help fine-tune the information and delivery to best equip you for that big meeting or next competition. From there, the only thing you’ll need to focus on is ensuring you have a pen close by.