Top Tips On How to Get VC Money

It is the massive investment boost that could take your startup to the next level, setting you on the road to a very profitable exit in the not too distant future.

The problem with getting that VC money is that you are operating in a crowded market. There are many great startups out there and everybody is competing for the same dollars.

Here we will take a quick look at some of the most important things you should be paying attention to if you want to stand out from the crowd and make that VC money your own.

Know How Much You Want to Raise

The problem with some startups is that they overestimate how ready they are to be taking on VC money.

This is the kind of cash that you should be seeking out when your startup is already up and running and ready to go to the next level.

Most VCs will want to have somebody on your board and be looking to get involved in your business so that they can play a key role in driving you and their investment to the next level.

Ask yourself whether this is the kind of partnership you are looking to get into at this stage.

If you only need around 500k right now, it’s probably not the right time to be knocking on VC doors.

A quick reality check at this stage will save a lot of wasted hours later on.

What problem are you solving?

It’s very important to be clear on exactly what problem it is that your company or service is solving.

VCs want to know how what you do that is different from those operating in your field.

Do you save customers time, money? You’ve got to be very specific when it comes to outlining this information.

The more confident you are about identifying these traits and driving home their implications, the better chance you have of making an impact on the VCs.

It’s no good having great technology if you’ve not also identified a real “pain-point” that your product or service alleviates.

What can you give them?

Aside from your startup’s aspirations what can you offer VCs outside of your product or service?

If you have some painpoint-solving tech that could be a good selling point.

If your existing customer base is already impressive that will pique the attention of the VCs.

The important thing is to focus on not only selling the future and how things could be in a hypothetic later time.

You need to play up the real-world assets you have right now.

This could even extend to the quality of the team that you have put together.

Take time to think about this and play it up when it comes to show and tell time.

Who are your customers?

One of the things that VCs are most interested in are those startups that already have a solid customer base.

You shouldn’t be looking for VC money unless you already have some key clients and customers in place.

Vigilant VCs will then reach out to these people and get feedback directly from the people you are already working with. Are these people happy? Are they going to renew your service?

At the VC stage, you should have concrete customer lists to show off. If you don’t and are still only creating a prototype, you’re probably not ready for VC money.

Show them the figures

Again, at this stage, you should have real-world data to wow the VCs with. It should be about data rather than extravagant adjectives.

If you tell a VC how much you’ve grown you also need to be able to show the data that backs this up.

And you need to be on top off and keen to share all of the existing data relating to your company that evidences just how much you are ready for growth.

What is your customer acquisition cost, for example?

You need to have this info ready to share and then use your data to show the VCs how much your company could grow based on their investment.

A demo

It is really important to remember that words are not enough right now.

It’s great to have a lovely pitch deck ready to fire off nice images and enticing figures, but is there an actual product or service that you can show to the VCs?

The ability to see a version of your product or service in action takes out a lot of guesswork.

An excellent pitch deck will be a great help in grabbing attention, but a more tangible lasting impression will be left if you can demo your product or service then and there.

And don’t forget the plan

It’s easy to get carried with the “why”.

You want to sell your product or service as best you can, but you can then run the risk of forgetting that the VC also needs to fully understand how you are planning for what happens after their cash injection.

The money you need to grow is essential, but you need to show the VCs how this will happen once you get it.

In conclusion, a big part of making successful VC pitches is determined by how ready your startup is for that stage of growth. And whether you and your company are ready for all of the added pressure that taking on a VC will bring.

Before you do go spending hours and hours networking and blasting out emails, ask yourself whether now is really the right time after all.

If it is, ensure that you are fully armed with real-world data that proves beyond any shadow of a doubt how your startup is ready for the next level and how the VCs would be making a big mistake to let you walk out of the door without their money.

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