Many friends have feedback to me about their difficulties in raising funds from Venture Capitalists for their start-up. Here's my advice on how to get your money from VCs, hope this helps!
1. Know Your investor
Not
many VCs are willing to invest in early stage startups, hence it is important to
know which VCs carry such a portfolio for a better chance.
2. Know what they are looking for
In general for
startups, investors look at PITS
1. Potential (Market
Size)
2. Innovation (Product
Differentiation)
3. Team (Founders’
skillsets and background)
4. Scalability
At the minimum level,
have a working prototype ready before you do your pitch. VCs rarely give out
money if you have nothing to show. Better still, get paying customers to
further prove your product’s value.
3. Gain visibility at conferences and events
Attend conferences and
entrepreneurship events, meet and talk to more people out there - they might
have contacts that they can link you up. Even if they don't, you gain
visibility and to some extent credibility when people know about you and speak
about you.
4. Get a mentor
Do you have a mentor for his
business yet? If not, ACE also does
matchmaking to link start-ups with successful entrepreneurs as their mentors.
Choose wisely, and mentors can be wings to your business. Moreover, having a
great mentor gives confidence to investors.
5. Build relationship
Besides having a good
business idea, it is important to establish relationship with the investor.
Seeking investments are often not a hit-or-miss pitching event, but about
slowly building the relationship with them such that they can feel safe betting
the money on you. One of the VCs i met mentioned that he sometimes put money on
people who remind him of himself in the younger days.
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