Each day venture capitalists and investors receive over hundreds of cold emails and meeting requests from start-up founders and small time entrepreneurs. It is difficult for VCs to process and select the start-up they want to fund that way. Instead, an entrepreneur should build a strong case first by getting to know someone from the company and then approaching the VC in their area of interest.
In the following ways, you can look out to attract more VCs for funding:
1. Innovative solution to a problem
Focusing on the problem and devising a solution is the key to getting more investors for your venture. In this era of cut-throat competition, simply coming up with a new idea isn’t sufficient. The idea needs to be worked on and presented in a complete manner with business suggestions, marketing tactics and target group mentioned in a well-compiled presentation. VCs will choose the most differentiated and rounded appeal which they find will enhance their chances of making profits as well. A revamped version of a done and dusted idea will instantly be rejected by the VC.
For instance, OYO rooms was a completely different and innovative idea which is why they have huge investors like GreenOaks, Sequoia Capital etc.
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2. Assumptions must be challenged on a continuous basis
Start-ups often stick to the original plan they have devised which is why they don’t grow with time. However, the basic thesis must be challenged from time to time as the markets are dynamic and constantly evolving. Assumptions must be proven or eliminated through basic research methods for a more rounded understanding of the business.
Once you are clear with all the factors related to your business, pitching to a VC becomes easier for you and the VC is also clear about what he investing in.
3. Think beyond the horizon and act
If you have a unique insight and are able to present it well in front of the VC, chances are that he will invest in your business. VCs don’t want to invest in an area beyond their zone or one that they think is not feasible. A VC doesn’t want to invest in an idea which is not innovative either. Hence, one needs to have a clear vision and come up with unconventional methods of making it work in the future. Strategic investors are more likely to invest in ventures that have an articulated vision of what they want to become in the future.
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4. Build a strong team of dedicated individuals
Founders need to encourage significant contributions to the start-up from people from different backgrounds. You must have a mission that is big enough to source human resource for different fields. Finding an entrepreneurial crew that wishes to guide their wider team as well as customers, markets and investors to a better future with conviction and humility is a time-taking but rewarding process.
A VC’s research will tell him about your dedicated team and your strong leadership which will definitely be a huge contributory factor for him to invest because strong leadership skills and a set vision are the keys to a success.
If you follow these rules, you will definitely find a great VC to invest in your company. We wish you all the best on finding a VC and on your start-up.
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