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| Venture Capital Financing |
That awesome moment when no one is
showing confidence in your startup and then suddenly you find a venture
capitalist ready to invest in your seed stage startup and enable you to turn
your dream into reality! Wow! It’s a dream come true! But wait, attracting a VC
for venture capital financing isn’t
a game either.
As per researches, out of 100 startups,
VCs usually select only 2 or 3 so you can easily figure out the toughness of the
financing option. That said, if you have all the necessary things in the right
place, you will always find it easier to grab the attention of a venture
capital firm. Below are the most important factors that VCs take into
consideration before investing in your business.
Most Important Aspects That A VC Would
Look For In Your Startup
A Unique Idea
Your idea is the first thing that will
catch their attention; if they find it interesting, innovative and competitive,
they will definitely value it highly. Venture capital firms, typically, prefer
to invest in high potential ideas which can be a product or service with huge
demand in the market. You don’t have to create something completely new; even
an innovative twist to an existing product or service can also bring in
potential customers. This is the first thing that a VC would look for in your
venture.
A Strong Value Proposition
Any business has to have a unique selling
proposition that can compel customers to switch brand. If you can demonstrate
to your customers why exactly a customer would buy your product/service, it is
a win-win situation almost. You can create a superb working model of your
business and bring in a set of beta customers to demonstrate market traction.
An Excellent Team
To implement and execute a brilliant
idea, you need a brilliant team which is the next biggest requirement for
attracting venture capital financing. Try to assemble the finest of finance and
management experts for your leadership team as these experts are ultimately going
to execute your idea and give a definite shape to your business. A smart,
intelligent, innovative, committed and honest team can significantly increase
the value of your startup so try to arrange it as early as you can.
Other Interested Investors
VC funding is very much based on demand
you can drive for your startup among other investors. These investors would
feel more interested if there are other investors standing on the line for your
idea. This gives them the assurance that your idea is in demand and there are
good chances of huge revenues. If you have more than one active investor for
your startup, it is great achievement as you don’t have struggle much to prove
the authenticity and potential of your business.
Conclusion
Try to ensure that all the the above
aspects of your business are in the most desirable state so that you can easily
convince a VC to think about your startup. Moreover, if you can bear 25 to 50
percent of the investment through your personal savings, it is undoubtedly be a
head-turner for the investors. If that sounds impossible, then at least 10
percent is also good enough to prove your confidence in your startup. Money is
there, all you need is to be present at the right place at the right time with
the right set of things.
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