5 Things Every VC Wants to Hear
Sometimes, one of the scariest moments in business is pitching to investors and convincing them on why they should give you money for your business and how you intend to use the money.
However, pitching to investors doesn’t have to be a terrifying act; once you know the right words and phrases to use as well as the correct information to provide, you are good to go.
Allan Willie in his article points out that, “Before they give you a cent, VCs will do due diligence and ask you some hard questions. You will need to be ready and have the answers.”
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You have to be fully prepared before meeting with an investor.
How then do you know the right words and phrases to say to VCs? Here are five things every VC wants to hear:
The market: How much have you studied your market and what exactly do you know about your market? Do you know much about your competitors and how they are doing? What is the advantage you have over your competitors and what makes you unique? What are the pain points of your potential customers and how to do intend to help them resolve those pain points? What market share are you focusing on and why? How big is the market and how stable is it? These are some of the things every VC wants to hear.
The details: You should, as much as you can, furnish the VC with the right information needed for him or her to decide on your start-up. VCs are interested in knowing how much you have invested in your business, how much you have made, and so on. You are there for finances, and so your financials are very important to them. And so, back up your details with documents, metrics, facts, and figures.
Your team members: You team members are important to the growth of your business and VCs want to ensure you have the best team on the ground who can help you take the company where you want it to go. They also want to ensure you have a solid team that can manage the funds invested in your business. They are also interested in committed and well-experienced team members.
What value do you provide: You must be solving a problem, and you should do well to explain to the VCs that there is a problem you are solving. What value are you bringing to the table and what makes your products/service unique from what is currently available in the market? Does your product/service have a unique quality that would make it difficult for it to be copied by others?
How you want to use the money: Never forget to explain how exactly the money would be put to use. It has to be in details, and you can use a financial forecast to help you adequately explain this. Tell us where to funds would go, when, how, and why.
Did we leave out some things from the above? Do drop your comments below.
