What are VCs looking for in your pitch?

Take-aways from a talk in the Trust Center on 7/5/16

When presenting to VCs, make sure you communicate: what is your main idea? What are the risks?

  1. Potential risks you should address:
  • Tech risks
    • Invention risk - can you actually develop your product / solution? Most VCs will not invest if there this risk exist so demonstrating technical feasibility is critical
    • How much more development is required? What is the complexity? How much tailoring is required?
  • Market risks:
    • Product- market fit
      • Who is going be the champion on site? What is going to make customers actively seek for your product?
      • Who is most likely to resist change and how can you address this?
    • Sales cycle:
      • What is the process to acquiring new customers?
      • Do you need a physical sales force (expensive)?
      • How do you get customer diffusion that is repeatable and scalable?
    • Market size
      • Is the potential worth the investment? $1B market is a good size because you’ll only be able to capture some of it. Overall market of $100M might be too small, especially if the acquisition process is hard/ expensive
    • Competition
      • Who are your main competitors and what do you offer that is different?
      • What makes you get a strong foothold? What will make you the incumbent and prevents others from entering the same market?
  1. Typical risks by stage of the company:
  • Early stage (seed) - Tech / invention risk/ Market risk
    • Very few VCs will take these risk so it is more appropriate to reach out to angel investors/ bootstrap
  • Round A with VCs - Achieving repeatable sale cycle
    • Only relevant if you figured out the technology and market fit.
  • Series B - scaling the company.
  • Series C - Aligning/ scaling the team to support more sales.
  • Round D - strategic growth initiatives.
Was this article helpful?
0 out of 0 found this helpful

      This website and all posts and content are intended for educational purposes only and for no other purposes. This website does not and is not intended to provide legal, financial or tax related advice. Although we take great care to make sure that all of our information is accurate and useful for it intended educational purposes, if you have a specific issue for which you need actionable advice, please come to the Martin Trust Center in person to speak to one of our Entrepreneurs in Residence (EIR) or consult a licensed attorney or other professional. Despite the backgrounds and qualifications of our staff, mentors, lecturers, authors, EIRs and speakers no attorney-client, advisor, or other confidential/privileged relationship exists or will be formed between you and the Martin Trust Center or the Massachusetts Institute of Technology. Under no circumstances should any content be relied upon in making any decisions that could have any financial or legal impact(s).
Have more questions? Submit a request


Powered by Zendesk