Breaking the mold in a pool of hopeful start-ups largely depends on catching the eye of a venture capital firm. When the odds are stacked against you and the most probable answer is “no”, it is pertinent you go the extra mile to stand out from the crowd. VC investments are hard to come by for a reason with over 65% of VC-backed startups lacking the income to return their capital, according to Troy Skalebund former CFO to the Walt Disney Company. The pay-out however certainly warrants the massive team effort it takes to impress the right people.
Venture capitalists offer an abundance of not only financial backing, but business guidance from seasoned professionals that will give you the space to grow exponentially, as well as a competitive edge in the market. But to get money, the biggest undertaking will lie in your ability to prove that you’re capable of making that cash back tenfold.
Being an enticing VC investment opportunity may feel like a cutthroat arms race with fellow direct-to-consumer businesses, but you may be surprised that the essential qualifiers to be considered an attractive prospect are things that should already be within your focus as a founder.
An Exemplary Team
Investors look for a pairing of both good management and an accompanying team of skilled professionals that can demonstrate they function as a unit. Your business should be a well-oiled machine, with the employees, the moving parts, all working together to make everything run smoothly.
But it takes much more than just skill to run a business. There also needs to be a harmonious blend of passion and a willingness to take criticism to be considered a worthwhile VC investment. This powerful combination of qualities tells investors that you have the grit and resilience to thrive during the growing pains of expansion.
It’s imperative to remember the obvious but oft-forgotten fact that businesses are powered by people. When you have a team that exhibits the courage to take the bad with the good, you’re a shoo-in for a spot on a venture capital firm portfolio.
A Promising Proof of Concept
As aforementioned, being an impressive candidate to investors means proving that you can make the big bucks so any evidence of positive early traction is going to great work in your favor. This is because early traction can tell them a lot about how your product is going to fair out in the real world, including if there’s a large enough market with the necessary problems for your product to be an undeniable solution.
Luckily there’s a lot more than just compelling numbers that you can use to make your case as a viable VC investment. If you have:
- Customer testimonials
- Admissions into competitive incubator programs
- A beta creation of your product
- Mentions in media publications about your company
Together these will undoubtedly prove that you’re ready to take the next big step to scale your business.
A Custom Customer Experience
A great benefit to being a DTC company is the ability to obtain behavior analytics and collect data that will help you optimize and personalize your customers’ experience to ensure clicks are converted into sales.
Proof of exceptional customer experiences for a company is measured by how difficult it is for customers to purchase your product, i.e., any barriers that delay your customer from making a final purchase. It’s also measured by how personalized the experience is. Tailored marketing, as well as tailored product recommendations, create convenience for your customers, thus making it more likely for them to continue buying from you.
Utilizing customer segmentation is a great example of this. We see this commonly with e-commerce companies in the beauty, television streaming, and fashion industries. Venture capital firms will no doubt be dazzled by a company’s capability to maximize sales to segments of customers all unified by a common need.
A Reliable Financial Strategy
Venture capitalists are there to give you the necessary funding to level up your company from the incubator to the masses, so ensuring you’re an expert in the numbers game will take you far. A favorable VC investment has a solid financial strategy that dictates when and where they’re going to spend their money and has proof to back up that they’re wise decisions.
“A conversation centered on a company’s revenue growth, sales funnel, and customer churn causes an immediate connection with investors because when entrepreneurs position themselves as metrics-driven, it’s as though they’ve entered an investor’s mind”, says the founder of investment platform Patricof & Co, Mark Patricof.
What This Means for Singapore-Based Start-Ups
If you’re a burgeoning start-up in the Southeast Asian market, you’re aware that there’s been a sudden rise in the emergence of companies in the past year racing to fill the gap for innovative, contactless interaction technology created by our post-covid world.
Because of this surge, the pressure is on for start-ups to make a mark on investors as many companies seldom achieve take-off without substantial funding. Take these strategies and utilize them as a checklist to prepare a pitch-deck that will not only leave investors in awe but also set the stage for long-term success.
Jenfi understands how stressful obtaining the right funding can be for new start-ups. Luckily, now more than ever there are myriad resources to access funding that’s the perfect fit for your unique needs. For instance, with Jenfi, you can use us to supplement your VC funding or make you look more attractive when it comes time to present to investors. Apply today to discover if you’re eligible for Jenfi funding!