Fundraising

What to have for initial discussion with the investors apart from the Idea, business plan and proto?

Anirban Gupta Associate Delivery Manager at Allstate Solutions Private Limited

August 25th, 2015

I have been working on my startup plan. I have the Idea, Business plan ready. Presently working on the proto which is related to mobile healthcare.I plan to start discussion with the VC and interested investors. Most of the funding which I recieve will be used for marketing and sales team and some of it in ramping up the tech team. Just wanted advice on what are the things, I should be prepared with to start any discussions with the Investors.

Diego Basch Holder of Self-Referential Title

August 25th, 2015

VCs are buyers of investments, and there is a huge number of startups to invest in. Why is yours a good investment for a VC compared to everything else they could buy? If you can't answer that question before meeting with a specific VC, don't waste your time and theirs. If you can, you need to convince them. 

The basic thing every VC wants is the potential for a spectacular ROI during the life of the fund. You need to *prove* to them that you have that potential. The obvious way to prove it is to have a company that is growing fast. If you don't have that, you will need a combination of other signals (track record, extremely deep knowledge of your market, momentum, etc.) 

Keep in mind that VCs have no incentive to help you until they have invested in you, so if you're not interesting to a VC you may learn very little from an interaction. Grow your company as much as possible without VC help. VCs want to invest in companies that may do well without them, but that they believe have the chance to do spectacularly well if they get involved.

Non-professional investors are different. Many have no idea what they are doing, and may invest in you because they like you or because of things they've read. There's no one-size-fits-all advice in this case: just be careful what you promise, and be extremely clear with the terms of the investment.

Muamer Avdic

August 25th, 2015

I've been reading into this a lot lately, and it seems as if investors today need to see traction from your startup before they will invest in it.  Having a team assembled around you will also greatly improve your chances of getting funded.  I think the only way you get funding without traction and strong team around you is history of starting & building great companies.  Best of luck!

Jennifer Jones

August 25th, 2015

I think it is a number of things including traction, team and market fit. Most investors are investing for the long term and are prepared to invest in companies that have strong growth potential.

Steven Rahseparian Founder & Chief Executive Officer at Secured Universe

August 25th, 2015

There is no "perfect" answer.  

What "works" will be unique to your deal, in other words, simply:

Why are you different? Or your unfair advantage.

If you are truly different, you may have a shot.


Mike Ryan Serial Founder

August 25th, 2015

Today most entrepreneurs who haven't already successful raised VC funding and had a successful exit in their past need to have a product in place with paying customers.

In my experience with recent current funding trends you should focus your efforts on building your team, product and acquiring customers ASAP before contacting investors including seed, early stage or venture capital.

Paul Graham of Y Combinator gives a good overview of funding stages here:

http://www.paulgraham.com/startupfunding.html

Good luck with your efforts!


Rex Stock

August 25th, 2015

As others alluded to, you will hear the word "traction".  But how, you say, can I do this without capital to build my product?  To that, you will hear nothing but silence. Unless, of course, you have a VC who is a friend of your family.