Asking this on behalf of many founders like myself, wanted to collate across multiple inputs: what is it that VCs really want to hear/see from a startup?
Would love to get inputs from VCs and other founders alike - basis your experience on what has worked what hasn't worked.
The usual suspects: obviously the founder credentials, TAM, insights, metrics. But, what else? Look forward to informed answers.
Good ones look for building capabilities (read velocity) , selling capabilities, founder-product-market fit, conviction, traction, growth, industry familiarity, financial & organisational due diligence and other personality traits. Ref checks is also very important. Bad ones invest in FOMO, the more you are able to create, the better.
For B2C I believe they also look at the story of the startup
Helps get easy media attention and enables hype driven sales. Atleast till they exit through IPO.
Interestingly every VC startup has a bittersweet emotional problem statement.
Great point, generally true across B2X . Any brand building asset is a great to have .
I talked to a startup founder(young 22yr old bloke). He got seed funding from Y combinator.
I asked him what that experience is like, how do they select people to incubate and invest in. He replied -
They see how well you have thought of the problem. Do you have the metrics required for the problem, do you have the solution and it's expected metrics. Have you thought of making your company 100m$ or more worth in years to come(do you have the vision to scale it).
How well do you know the demographics, the minutest of the details of the problem etc.
That's all, once you have clarity on your idea and a plan to make it successful in the long term, you can get the funding.
Every point in the below thread is valid. Each comment appears to be from experience they look very possible and close to reality. Never dealt with a VC before. But I deal with greedy and entitled people every day.
What if VC investing is based on commissions in addition to equity?. Meaning, the VC strikes the deal with the founder not just for equity but also contracts from the company. The founder has to purchase/outsource something to a "designated vendor".
In our country companies keep track of how many times employees take a break. So, VC's investing million dollars in startups with just the belief they can make more money in the next round of fund raise seems to gentlemanly. Considering that founders buy luxury cars after every fund raise is an open secret.
On your point on kickbacks/ preferring specific vendors -
In a way this does happen. VCs promote their portfolio companies - if one start-up sells an HR platform, the VCs would push for this HR Saas product across their other investment startups.
But understand that VCs really want startups to grow multiple times in value - that's the only way they can make money. If VC invests 10cr in a startup, and asking start-up to take services of only a specific company - the 2-3cr they make in this commision is of little value.
Hi Grapevine,
I'm Sajith, Partner at Blume Ventures, where I oversee consumer and India B2B investments.
I am a long-time media executive turned VC. After a two-decade-...
Hey Sajith, Great to see you here and very much thanks for doing this. 1. What factors does Blume consider whil...
I'm the founder who "Left a ₹50L+ job. Raised $2M. Built something profitable. Shutting it down now." 👋🏼
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