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Your guide on how to approach venture capital firms

How to approach and work with a VC firm. Learn what VCs are looking for, why you should approach them in the first place and tips to get their attention.
May 14, 2021

If you’re running a startup (or thinking about creating one!) the big guns of company funding, venture capitalists will likely have been on your mind. After all, they are notoriously difficult to access! But those sleepless nights and hours spent researching would not be wasted because gaining their attention can make or break an idea.

The funding landscape is tough and it’s always changing. You could think of the venture capitalists as being part of that world. They are a major player in any startup founder or entrepreneur’s life, but what do they really want?

You’ll need a team behind you

You know what they say, "Never go to battle without your army."

You won’t be expected to have three thousand of the world’s finest employees, complete with Google-inspired campus and office sleep pods. You’ll need your own expertise as well as those currently on board – advisors, mentors and investors alike.

Numbers. Before pitching an idea to investors, do your homework.

A good pitch should be backed up by solid evidence. If you’re telling them you expect fifty percent growth in twelve months, make sure that your company is ready for it! Be prepared to show how your prediction was calculated and ensure all of the metrics are on target before making any claims.

When it comes to VCs, you will want different data depending on your industry. For example, if you are in FinTech and researching a competitor’s successful online fashion retailers won’t be specific enough because they’re not comparable or relevant in that area of business. You’ll need to research key elements for success such as the number of customers who have signed up with their service which is much more pertinent information when looking at this type of company so keep these important details in mind when trying out new things!

One way that entrepreneurs can use investors’ feedback productively is by using other companies’ successes as examples – but make sure those comparisons are really worthwhile before making them!

Show ventures how you’ll be using the money

venture capital cash for business

We know you may think this is a no-brainer, but it’s important to always keep in mind that when VCs are giving out cash, they will want detailed information on what the company plans on doing with their money.

Research your VC

The right VC can be the difference between success and failure, but sometimes it’s hard to know which one is best for you. It’s important that when researching a VC firm, not only do they have expertise in your industry or market sector (if any), but their portfolio aligns with what you want out of them as well. For example: if apps are all I’m interested in funding then maybe this isn’t the place for me; on the other hand medical technology might just be my cup of tea!

Selecting resumes from those with a vested interest in your business area is advantageous, but be prepared to answer some tough questions. They will know all the right things you do wrong and they’ll have an eye for what’s next on the horizon.

Don't be a jerk (but don't be too cool, either)

As a young entrepreneur, it’s important to learn how to balance your enthusiasm with the business side of what you’re doing. VCs want entrepreneurs who are enthusiastic about their work–but not so excited that they become annoying! They’ll also be looking for good communication and listening skills in an applicant as well.

You have just a few minutes to make an impression, so keep your message concise and direct. Share the future you envision without getting bogged down in boring technical jargon or unnecessary details about how you’re going work towards that goal.