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7 things to know before you present your startup to VCs ?

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I had a fortune of spending some time with one of the Pune based VCs last week. During our small 15 minute discussion, I got a glimpse into what VCs think, especially while making a decision on funding a startup.

VC Presentation

Here are top 7 things you should remember while pitching to potential VCs:

Be ready with your Product

This by far seems to be the most important aspect that VCs see while making a decision – At what stage of development is the product or service. However good your idea may be, very few VCs will be interested in it. Unless and until you have a working product (even if it is prototype), your chances of getting funding diminish drastically.

Your opinion’s don’t matter, hard facts and figures do !

Your opinions don’t matter to VC’s unless you are credible and have been there, done that. To add to it, if VCs have slightest difference of opinion than what you have, your chances of getting funding can come down to zero. It is always safe to stick to facts and figures when making a point.

Know your competition very well

In general, most of us do this quite well, however we need to know our competition from VC’s perspective. The positives / negatives of competitors and how they affect your business. You have to be very clear about the key differentiators between you and your competition.

VCs are skeptics

You need to understand this well. VCs will always look at your idea and product like a die-hard pessimist. They will only put their money in your venture once they get satisfactory answers for every aspect of your startup.

VCs hate outrageous projections

Never, I mean never try to balloon your figures on projections. VCs see right through it. As mentioned earlier, your projections should be based on solid facts and figures (not your opinions). The moment VC feels that figures are too good to be true, they will turn negative.

Be prepared to be grilled

VCs will grill you on anything and everything. Be prepared to answer questions that you may have never even thought. Make attempt at answering if you are confident that you can take it through. If you don’t, say “no”. VC’s will forgive you for not knowing certain things, but never if they feel you are lying.

Never show your desperation

Always be calm and composed while presenting your idea. You should be enthusiastic, but over enthusiasm could come across as desperation. And if VCs smell desperation in your talk, they will think twice before putting even a dime !

"7 things to know before you present your startup to VCs ?", 5 out of 5 based on 1 ratings.
  1. Sav @ Custom T Shirt says

    Well all the points are notable, in the present age there are competition in every aspect, but amongst that rush there are some innovative ideas that shines, so if your business idea is innovative then VCs wont hesitate to fund you.

  2. Vijay says

    Great Blog! Excellent insight into VC mind. I am also working on developing an idea and would like to approach VCs in near future. I am wondering if you could share executive summary template which you might have come across and found really effective with VCs. Appreciate your help. Thanks

  3. trakin says

    Usman,
    Excellent points made by you. You have got a interesting blog there…

  4. Usman says

    Having pitched to many vc’s before as well. This is a very good list.

    Some key points before presenting to vc’s for me are:

    1. Read up more about who you are pitching to. This helps you to cater your presentation to what they expect.

    2. Know your presentation material like the back of your hand. I have seen many startup choke at this stage. A lot of practice on your pitch goes a long way.

    3. Don’t start the presentation with boring run of the mill stuff. Use subtle but effective messages early on to get them interested.

    Check out my blog for more entrepreneurial and business related stuff. http://www.usmansheikh.com

  5. trakin says

    Hey jai,
    Thanks for dropping by…Good points you mentioned there, especially the second one !

  6. Jai says

    Arun: A good one.. would like to add few more things:

    1. You must have answer of the question – How you are different that your competitor and why customer should come to you rather than going to your competitor.

    2. You should know, in future, what are the areas you can jump in using your existing idea. That means suitability/compatibility of your ideas in other business.

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