3.) Demonstrate Market Traction and Develop The Perfect Team.
In such an aggressive financial state where only 2.5% of angel-funded businesses move on to raise venture capital, it’s crucial that a startup can show awareness and related in their market. Early-stage VCs want to witness a considerable market that has enough potential before writing they go write out a check, and startup businesses can reflect this through a pilot or beta consumers. More principally, startup companies should reflect the strategy to change that pilot into a paying customer. Nina Nashif, founder and CEO of Healthbox, claims that showing market traffic is crucial, and startup businesses should be able to copy the routine of turning a pilot into a paying customer over and over again. The greater the number and the quality of early customers displays the startup has the ability to grow past the initial interest from early adopters. In terms of teams, many believe that acquiring the right team is the most important key in gaining venture capital funding. Startups barely ever have the perfect item and market it right away, and they will probably need to veer based on customer wants and needs, competitive aspects and industry transformation.
2.) Develop a Compelling Value Proposition
Venture capitalists are very sophisticated in the startup field so you need to be able to prove to them why your business is different and more unique than each of your competitors. Proving to the VCs that you have potential value proposition that is incredibly important, and is often missed by first-time entrepreneurs. Another important factor of creating a value proposition is scalability. Are there enough people into this idea to scan the company? Even if you have a really awesome, intriguing concept, it’s not fundable if it can’t soar across the world. What market are you looking to go after, and how big is that market? Investors need to understand that the market option is flexible, and that your company can create meaningful traction but only at a particular scale. So, in the end, what you should be taking away from is that if your company is a product, prove that people and their companies are willing to pay for the product and have a need that is not yet met that your product could definitely fill. If your company is a marketplace, be ready to show traffic on both sides of supply and demand.
1.) Have a Unique Idea With High Barriers to Entry
In order for venture capitalists to analyze the huge risk that they are about to take with your business, you need to offer them a fresh and relieving business venture that vows to fill that open space in the marketplace. Anyone can sell anything online, but there are certain items that have yet to be created — just like the car battery that goes on forever and to infinity, or inventive, reachable and cheaper sources of energy, these are the kind of concepts that venture capitalists would seriously drool over — they are always inspired by the next big thing like anyone else would be.
Watch the video below on how to get your startup funded!