Teach You How To Win Venture Capital By Startups

As a lawyer who provides consultancy services for start-up companies, I am often asked by my clients the question of how to make their company win the favor of venture capitalists.

In fact, this question does not surprise me. In this industry, the most important thing is the so-called "A wheel". financing Crisis. Moreover, there is an undeniable fact that the number of newly established start-ups has increased faster than the growth rate of venture capital costs. In addition, today's financing environment is becoming more competitive.

So how did I answer the questions raised by the founders? My answer was given by asking questions, and I asked, how much damage do you have in your ideas or creativity? This is actually a concern for most venture capitalists.

However, the concept of forming a good idea has been developed in a number of business cycles in the past. In today's economic environment, like most of us, venture capitalists also have pressure and hope to invest less in return. Especially in recent years, venture capital assets have lost their value. Therefore, limited venture partners are more willing to help start-ups who are not labor-intensive. Only such start-ups can generate real income in the first few years.

The actual result is that venture capitalists prefer ideas that can solve real big problems. Usually, they hope that this idea or creativity can solve a wide range of business needs, not just for consumers. In addition, such creative ideas do not need to conceive the future to understand their potential market value. Venture capitalists like to see clearly that a product or service that is really needed at the moment is likely to accept a relatively active and less risky start-up.

If a VC is very interested in a creative idea, he / she will consider other factors that influence the success of the start-up company, such as talent, experience and technology resources. Unfortunately, for first-time entrepreneurs, those who have successfully established businesses are Entrepreneurship People will have great advantages in this field.

Venture capitalists also like companies that do not need to spend large sums of money to buy expensive assets, such as manufacturing equipment and telecommunications infrastructure. Whether in Silicon Valley, Boston or New York, low investment and high return is definitely a hidden rule. This sentence is very important.

Microcosmic and macroscopic Economic trend And dynamic understanding is also very important. This is helpful to analyze the overall economic situation and market opportunities. Entrepreneurs should tell venture capitalists that you are well aware of your field and can adapt to changes in the economic environment. At some point, it will take months, even years, to launch a new product to the market. During this period, the surrounding conditions will change - are you ready to make quick decisions to keep the business viable?

I often tell the last thing about founders of start-ups, that is, there is no need to worry about the success of the first round of financing, because many successful companies have not received the first round of financing. Nowadays, technology is relatively easy to understand and cost is low, so for entrepreneurs, it is relatively difficult to create valuable enterprises. As an entrepreneur, don't be constrained by difficulties and find a way for your goals. In the end, you will find that vision and commitment are the most important assets for any new company.