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.