Take-aways from a talk in the Trust Center on 7/5/16
When presenting to VCs, make sure you communicate: what is your main idea? What are the risks?
- Potential risks you should address:
- Tech risks
- Invention risk - can you actually develop your product / solution? Most VCs will not invest if there this risk exist so demonstrating technical feasibility is critical
- How much more development is required? What is the complexity? How much tailoring is required?
- Market risks:
- Product- market fit
- Who is going be the champion on site? What is going to make customers actively seek for your product?
- Who is most likely to resist change and how can you address this?
- Sales cycle:
- What is the process to acquiring new customers?
- Do you need a physical sales force (expensive)?
- How do you get customer diffusion that is repeatable and scalable?
- Market size
- Is the potential worth the investment? $1B market is a good size because you’ll only be able to capture some of it. Overall market of $100M might be too small, especially if the acquisition process is hard/ expensive
- Competition
- Who are your main competitors and what do you offer that is different?
- What makes you get a strong foothold? What will make you the incumbent and prevents others from entering the same market?
- Typical risks by stage of the company:
- Early stage (seed) - Tech / invention risk/ Market risk
- Very few VCs will take these risk so it is more appropriate to reach out to angel investors/ bootstrap
- Round A with VCs - Achieving repeatable sale cycle
- Only relevant if you figured out the technology and market fit.
- Series B - scaling the company.
- Series C - Aligning/ scaling the team to support more sales.
- Round D - strategic growth initiatives.
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