What I look for in a pitch
news.greylock.com
What I look for in a pitch
1–10 of 23 posts
Re: What I look for in a pitch
#2I don't understand.
> What’s the difference between a great idea, and a early-stage VC-fundable business?
Well, an early-stage business in my mind is a business that has some kind of product or service already built or at least a prototype.
But hopefully they already have customers.
> If the customer base grows, then you suddenly need to build a company that can support that growth — an executive team of leaders and an organization that can operate and adapt effectively without the founder driving every decision.
In my mind I want to build a company with as little employees as possible with as much profits as possible. Is the way to do that really by employing an "executive team of leaders"? Isn't it just better to hire people that are productive and don't really need supervision in order to get things done?
Later on the author writes about an IPO, which is something that feels so far from the initial founding stage that it is useless to think about?
I wouldn't want to build a company if the only goal is to complete an IPO as soon as possible but maybe that's just me.
Re: What I look for in a pitch
#3I don't understand. > What’s the difference between a great idea, and a early-stage VC-fundable business? Well, an early-stage business in my mind is a business that has some kind of product or service already built or at least a prototype. But hopefully they already have customers. > If the customer base grows, then you suddenly need to build a company that can support that growth — an executive team of leaders and…
VCs aren't trying to build companies. They are trying to use companies as tools to get themselves big exits. There is a big difference.
Re: What I look for in a pitch
#4I don't understand. > What’s the difference between a great idea, and a early-stage VC-fundable business? Well, an early-stage business in my mind is a business that has some kind of product or service already built or at least a prototype. But hopefully they already have customers. > If the customer base grows, then you suddenly need to build a company that can support that growth — an executive team of leaders and…
Thats exactly what I told an investor who approached me. It looks like these people look only for money/IPO and demanding from us not only a product but also to make an executive team.
I give up the big profit, I only care about "not caring for employees"
Re: What I look for in a pitch
#5I don't understand. > What’s the difference between a great idea, and a early-stage VC-fundable business? Well, an early-stage business in my mind is a business that has some kind of product or service already built or at least a prototype. But hopefully they already have customers. > If the customer base grows, then you suddenly need to build a company that can support that growth — an executive team of leaders and…
The author is a VC and the article is written from the lens of how to pitch a VC.
There's nothing wrong with building a company the way you're describing. In fact, it's the one most founders should take.
Raising even a Series A basically sets a company on the path of IPO or bust. Just don't raise VC and you can do exactly what you want.
Re: What I look for in a pitch
#6> What’s the difference between a great idea, and a early-stage VC-fundable business?
I think we forget that a restaurant can be a great idea. It only makes sense for a restaurant to be an "early-stage VC-fundable business" if it's going to turn into a huuuuuuge chain.
But more importantly, the story of McDonald's rings true: McDonald's founder didn't do the work of expanding the chain.
In the VC world, a successful investment has a 10x return on the investment. A great idea may turn into a great small business with organic growth. It can provide for a career without needing VC investment! This can be a small group of consultants, or someone who builds an SAAS business.
(Edit) But, the thing about restaurant vs tech is that there's plenty of room for 1000's of small burger joints to co-exist with McDonald's. It's a lot harder for 1000s of "Joe's Git hosting" to co-exist with Github. Thus, it's often harder to see how a "great idea" in tech can turn into a small no-VC business.
Re: What I look for in a pitch
#7I don't understand. > What’s the difference between a great idea, and a early-stage VC-fundable business? Well, an early-stage business in my mind is a business that has some kind of product or service already built or at least a prototype. But hopefully they already have customers. > If the customer base grows, then you suddenly need to build a company that can support that growth — an executive team of leaders and…
VCs exist to find the small subset of companies that need cash for hypergrowth. It's not for everyone.
For many other businesses, a loan or swear equity is more appropriate.
Re: What I look for in a pitch
#8I don't understand. > What’s the difference between a great idea, and a early-stage VC-fundable business? Well, an early-stage business in my mind is a business that has some kind of product or service already built or at least a prototype. But hopefully they already have customers. > If the customer base grows, then you suddenly need to build a company that can support that growth — an executive team of leaders and…
As others already mentioned, it sounds like your preference is building a bootstrapped company from day one without need for any VC funding. You're not the intended audience for the author's blog post.
But to respond to your other questions...
>Is the way to do that really by employing an "executive team of leaders"?
Yes. Many founders can't delegate and end up obsessively micromanaging others which puts a ceiling on growth.[1]
>he author writes about an IPO, which is something that feels so far from the initial founding stage that it is useless to think about?
The IPO thinking at the very early stage isn't necessarily premature because the founders may make early decision to offer equity (stock options) to employee #2 instead of a higher market salary. (Because they have no money to pay high salaries.) If so, they've basically chosen the fork in the road towards an IPO. If the employee can't eventually sell the stock (liquidity provided by IPO), there isn't much point to offering equity.
Re: What I look for in a pitch
#9The 'no market need is key'. I am remembering when I started my first business after graduating college. It was a retail business. The day before we even opened people were knocking on the door wanting to come in. Everything else that happened afterwords just flowed from that. It was really just simplistically executing and making it happen.
Re: What I look for in a pitch
#10There is a difference between what VC's claim they look for, and what they actually look for. What they actually look for is momentum and all these conditions are 'bent' when that weird FOMO feeling takes over.
Anyone who thinks that all this data is pertinent to make the investment decision will most likely never say yes to any startup.