How VCs decide to invest in your startup
TL;DR: Team, Product, Market, Traction. What characteristics of a startup make it attractive for venture capitalists to invest in it? If you are a startup founder preparing for that pitch, wouldn't it be nice to know the answer so you can prepare well to maximize your chances of getting that coveted term sheet? For those who are listening, there is no scarcity of advice. Everyone from VCs, startup founders who secured funding at significant valuations and others on the sideline, all have something to say. Are any of these relevant to startup founders? What is noise and what is signal? Do any of these have hard numbers behind them? Until now there was no hard quantitative data on startups that pitch to VCs and the outcome. Thanks to data from Jay Jamison, partner at BlueRun Ventures, I have data on 216 startups that pitched to his firm. Jamison rated them on four metrics, Team, Product, Market and Traction using a 5-point scale and also noted the outcome of their pitch. The outcome is rated as likelihood of getting term sheet on a five-point scale, with 5 meaning they got it. via Iterative Path.
Published: Sat, 16 Feb 2013 18:07:25 +0000