Venture Capitalists are NOT banks....

Sorry to burst your bubble young startups.....

VC’s are NOT banks ?? Shock horror ??

VC’s gotta raise the dosh from LP's (limited partners) before they can allocate it to founders who are a better bet and can potentially bring ROI to the VC’s.

They also have “allocation dates” when they distribute the funds raised to superfantastical startups within their thesis.

Yup, just because you are a fantabulastic startup looking for funding DOES NOT mean that EVERY VC’ is suited to your startup, but that’s another post??

Q: What is one of the great ways to show VC’s that you are a “better bet”??

A: Know how to produce traction BEFORE investment with a strong kick as* team & a scalable product. (There are many pieces in executing this effectively).

Q: What if Im not sure how to produce traction & my team is not where it needs to be??

A: There are TONS of superfantastical startup mentors that have done it effectively & now help others like you to do it effectively.

?? I can share some of these excellent mentors with you from my network upon request, or you can chat to our team.

VCs are not magicians.?They can't just make money appear out of thin air.?They have to raise money from their own investors first.?So,?don't expect them to give you a blank check just because you have a great idea (it's not about the idea, it's about the effective development & execution of that idea...)

VCs are not your parents.?They are not going to hold your hand and walk you through every step of the way.?They may bring extensive expertise in addition to dollars, but they will "teach a man/woman to fish" rather than bring the fish to your table...

VCs are not here to be your friends.?They are investing in your company because they believe it has the potential to generate a high return on investment.?Don't expect them to be your BFFs.

How to Show VCs That You're a Better Bet?

Have some traction before you look for investment.?VCs want to see that you have already started to gain traction in the market (customers, users, or revenue).

Have a rock-solid team.?VCs want to invest in teams that have the experience and expertise to execute on their vision.?Make sure your team is made up of people who are passionate about your business, facing the same direction (vision/mission), and it doesn't hurt to have a proven track record of success. ?VCs invest in people, not just ideas.

Be able to articulate your vision clearly.?VCs want to invest in startups that have a clear and compelling vision for the future. Be able to articulate your vision in a way that gets VCs excited about what you are building.

Do your research.?Before you pitch to a VC, make sure you understand their investment thesis and portfolio. Nope, every VC is NOT an ideal fit.

Be prepared to answer questions.?VCs are going to ask you a lot of questions about your business. Be prepared to answer them in a clear and concise way.

Be confident.?VCs want to invest in founders who are confident in their abilities. Believe in yourself and your business, and let your passion shine through in your pitch.

Have a clear and concise pitch.?VCs are busy people.?They don't have time to listen to long,?rambling pitches with lots of jargon.?Be able to articulate your vision and business plan in a clear and concise way to get to the point QUICKLY.

Be realistic about your funding needs.?Don't ask for more money than you need.?VCs are more likely to invest in startups that are asking for a reasonable amount of funding, knowledge of exactly where it's going & WHY.

Genuinely build the relationships long BEFORE you need them. Get to know other founders, mentors, and investors. Your network can be a valuable source of support and advice. 9 out of 10 times VC's invest in founders that have been warmly introduced to them by trusted partners/network relations. Word of mouth speaks VOLUMES!

Don't be afraid to fail.?Failure is a natural part of the startup journey. Don't let it discourage you. Learn from your mistakes and keep moving forward. Raising money takes time and effort. Don't give up.

Conclusion

Raising money from VCs is not easy. But it's possible if you have the right team, a clear vision, traction and a realistic plan for success.

So, when chatting to them remember that they're not banks and they're not your parents. They're investors who are looking for a return on their investment & selective about who they invest in.

If you don't have traction yet or your team is not where it needs to be, don't despair. There are many resources available to help you get there. There are also many great startup mentors (including our team) who can help you guide your journey.

Now, go forth and conquer the VC world!

Leaving this here for young startups to read over & over again until it sinks in ??

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