Understanding VC Investment
How to pitch to a venture capitalist: Market + Management + Model + Momentum
Jun 09 2017
I attended the Lisbon Investment Summit in June and wrote about my experiences here. One of the best sessions was with Boris Golden called “Understand Investment”. These are my notes:
- VC’s are seeking to identify high-potential startups, and then support and fund them.
- They are looking for something that is innovative and unproven.
- A startup is not a company but an organisation searching for a business model,
- Whilst executing and discovering a scalable way to grow.
- Startups need money for ambitious but credible growth plans.
- A typical stake for a VC could be roughly 20%.
- VC’s want an exit price of at least 100m, otherwise their business models don’t work out.
- $10m can seem a lot for a founder with a 30% stake, but it’s not enough to attract VCs, so aim higher.
How to pitch
- Identify specific people with real needs
- Size of market
- Why now?
- What is your clear competitive advantage - why can no-one else do this?
- Find a large and attractive market…
- Build a smart, skilled and cohesive team
- With a strong ability to deliver quickly and to learn quickly
- That is ready to go big whatever it takes
- With a unique vision and project-fit
- Valuable and differentiated products
- Efficient go-to-market and growth channels
- Profitable monetisation strategy
- Scalability and defensibility
- Show traction and that you’ve cracked the important problem
- Show ambitous and credible growth plans
- With a capital-efficient growth model
- And a clear strategy to scale and win