Venture Capital Strategy: How to Think Like a Venture Capitalist

better/faster/cheaper.

Our ability to attract the best startups is based on our reputations.

is growth trajectory. Not every company in an industry has the same potential to grow. If we expect our startup to double revenue each year for the next several years, we’d expect a higher multiple than a more mature company that might be doing well to grow 10% year over year.

Do we have the right people in place? Team How will we stop copycats? Secret Sauce How quickly and perhaps profitably can we grow? Business Model

how easily other companies might enter the market, whether there are other types of products that could solve this problem and the relative power of buyers and sellers.

A related example is the founder who still has a day job. This we cannot abide! If an entrepreneur does not have the confidence to commit all their time (let alone money), how can we have the confidence to invest?

An LOI is a non-binding document written by a potential customer who is excited enough to put on paper their intent to become a customer. This is a letter, not a contract, written on the customer’s company letterhead, basically saying, “We’ll buy this if…”

VCs spend a lot of time at industry events to keep these networks active. National conferences, venture showcases and even startup competitions, all of which are opportunities for VCs to nurture relationships with experts who might eventually be helpful for sourcing deals, performing due diligence, finding a strategic partner for a portfolio compan

If the founding team had previous successful exits, VCs are often willing to take a leap of faith on traction.