Venture capital · Fundraising

Which VCs lack conviction?

Bill Wade Software Engineer at Cloudflow

March 24th, 2016

I found this article from VC Patrick Meenan on what VCs who are invested in you should be primarily and secondarily focused on. It makes total sense but I find most VCs focus on metrics not what he says should be primary:
  • Long-term product vision
  • Sustainable competitive advantage 
  • Can their capital accelerate your growth?
  • Getting you connected to other founders in their network
  • Founder's personal aspirations
Secondary areas of interest should be:
  • Current ARR
  • Historical MoM growth rate
  • TAM
  • Historical cohort analysis
  • Current cap strucutre
  • Which competitors have been funded.
It's refreshing to see, but I find it to be the exception. Would love to hear from founders that have or had boards and what they would add to the list of things VCs focus on too much or not enough.
You have an idea. Now it’s time to turn it into a brilliant and beautiful product. In this course, you’ll learn specialized tactics to study your user, create testable wireframes, and transform them into fully functioning features and products.

R. Singh Entrepreneur, Advisor, Get things done

March 24th, 2016

It really depends on the investment stage. The seed or first round is generally done on promise and hence all these primary metrics are on the minds of every VC that is investing in early stages of a company. However, for later stage funding, the secondary questions become more important since these are the proof points of whether the initial stage is working as expected.