Why It’s Pointless to Approach Potential VCs with Nothing More Than an Idea and A PowerPoint Deck

Enthusiasm and charisma are not enough: VCs expect a certain level of proof that the idea is viable and can scale significantly.

Photo Credit: Shutterstock (via Viola Notes)

Not every idea you think of is viable, or good, so be ruthless with yourself in judging every idea to make sure it’s worthy of a VC investment.

2) Make sure that your idea is unique and know where you stand against competitors in your niche.
Many entrepreneurs are so impressed with their own startup idea, they’re quick to proclaim “there’s nothing else like it!” But the reality is that there are now so many startups in the world, it’s highly likely that if you’ve thought of an idea for a startup, it probably already exists. And if it doesn’t exist, you’d do well to ask yourself why. More often than not, if the answer isn’t “because the technology for it doesn’t exist yet”, it’s most likely “because any time this product or service was ever offered in the past, no one wanted it.”

Unless you’ve just invented something so new it’s on a par with the first airplane, smartphone, or something totally novel that stands to profoundly benefit mankind — not having any competitors is usually a sure sign that you’re on to a dud, so you should definitely avoid bragging about it.

VCs need to know how your startup is going to stack up against your competition, so you better know who your main competitors are and be sure that both you and your startup have what it takes to compete against them.

Sometimes new startups are born simply because their founders are certain that they can “do it better”. And that may be so, but If you want to launch a startup in a niche that’s already crowded with competitors, you need to be sure that your startup has a point of difference that’s so unique or original, it clearly sets you apart, even from future copycats.

Innovation needn’t only apply to technology, it can also apply to your branding, your business model, your marketing, etc. And if that’s the case, you must always live up to that point of difference, or your startup will either fail or fizzle when an even better version comes along.

No VC will ever invest in something you can’t prove has the potential to generate significant revenue.

5) Develop an MVP (Minimum Viable Product) in order to demonstrate both demand and growth potential.
By definition, an MVP is the ‘minimum’ version of your product, so it needn’t include all the ‘bells and whistles’ and slick packaging that can obviously be achieved with a big budget, but it does have to exist in an iteration that can at least demonstrate the idea, the crux of the technology, and an active user-base that’s indicative of a genuine interest in the product.

VCs want to be sure that there’s a real demand for the product, and that your team is capable of growing both the user-base and revenues. This isn’t something you can convey with a mere PowerPoint deck, or even with an untested MVP. A more sensible idea is to launch an MVP and give it at least a few months, so that you can gather data that actually demonstrates an “upwards trend” in the key performance metrics.

Allowing an MVP to run for a few months before approaching VCs also has the added bonus of revealing bugs and getting precious user-feedback that can help you optimize the product and fine-tune your pitch.

In order for VCs to feel confident about investing in you, they like to see that the team they’re investing in is strong and committed for the long haul.

7) Don’t just have a go-to-market plan — demonstrate that you can carry it out.
Often when a startup’s founders hail from either a technical or business background, they rely on either their technological or business prowess to entice a VC to invest, but they don’t always consider the challenges around actually reaching their target market in order to generate awareness, interest, and revenues.

It doesn’t make sense to create a product if you have no idea how you’re going to market or sell it.

Whether you have a co-founder who can develop a sales and marketing strategy or whether you engage an external consultant, you need to demonstrate to VCs that your plan for reaching potential customers is sound, and that you will be able to carry it out in order to meet the kind of ambitious growth milestones expected from a startup that’s destined to rise to that “top 10%” I referred to earlier.



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Noya Lizor

Freelance copywriter who loves pushing the envelope. For more of my insights and musings, follow me on LinkedIn: https://bit.ly/3nuHDVF