SO! You’re an entrepreneur with a new product or service that is better than all the rest, right? You’ve already been through the design phase, run the tests on your prototype and you know beyond the shadow of a doubt that people will want what you’ve got. The only hurdle you’ve got left to jump over is the FUNDING; you and two or three others worked on the design and testing, and you have pooled your funds to get started, but that well is running dry, because it took a bit longer (and more $) than you thought to do the design work and get the prototype verified. You still need a couple hundred thousand dollars (or more) to do your startup and begin making your first million, so you’re thinking about doing a pitch to a VC (Venture Capital) firm in your local area, but you’re not exactly sure what they will want to know in order to get you started. Here are a few of the things they will be looking for and asking you about…
Most VC’s won’t even consider investing in your idea(s) unless you can very clearly outline what your plans are for the business; they will want the plan to address (at least) the following:
- Description of your company and the product
- Description of your target market and its size
- Resumes of your management team
- Reviews of your business environment and the competition
- A detailed financial projection
It doesn’t matter if you only have two or three people, what the VC will be looking for is your team’s ability to collaborate on ideas! You can have the best product or service on the market, but with no backing or resources your business plan could become stagnant. Is your team dedicated to making sure that they are offering value to the customer? Will they go to any length to ensure repeat business? Are they honest in their dealings with the public?
The VC will be looking to make sure your product or service is something your customers will be unable to live without, can’t get anywhere else, or can deliver a product experience unlike another.
Explain, very clearly, how big the market you’re in is, and how well you know your ability to position your company to attract new and repeat customers that will beat out your competitors. What problems does your product/service solve? Why is this a problem that you & your team can solve (better than “the other company”)? How big is the opportunity?
Your COMMERCIAL VIABILITY
The larger your market is, and the easier it is to reproduce or duplicate your product/service, the quicker your company will begin to generate revenue. The shorter the cycle for generating revenue, the more the VC will be willing to invest in your idea!
If you’re local to the Olympia/Thurston County area, and believe you have all these points covered, you may want to setup an appointment with Ajax Venture Group