The feeling I get reading this, is that there's lots of groupthink and a whole lot of luck among VC's...
What I look for in a pitch
11–20 of 23 posts
Re: What I look for in a pitch
#12There 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.
What they actually look for is momentum and all these conditions are 'bent' when that weird FOMO feeling takes over.
Yup, this exactly. MAYBE your team matters depending on who you are talking with, but if some VC gets a whiff that you have 2MM users, are growing 5x MOM for the past 6 months with 1% churn and high engagement they will literally hunt you down to throw their money at you.
Re: What I look for in a pitch
#13I 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…
Offering equity is nothing more than giving a stake in the company. An IPO is only one way that can pay off, and these days probably not even the most likely.
Of course VCs want you to believe that an IPO is the only successful exit, because they want moonshots. But as a founder you need to keep your own council as to the wisdom of pursuing growth at all costs.
Re: What I look for in a pitch
#14Earlier quoted context omitted.
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…
Offering equity is nothing more than giving a stake in the company. An IPO is only one way that can pay off, and these days probably not even the most likely. Of course VCs want you to believe that an IPO is the only successful exit, because they want moonshots. But as a founder you need to keep your own council as to the wisdom of pursuing growth at all costs.
>Of course VCs want you to believe that an IPO is the only successful exit,
Yes IPO is not the only way. VCs will also consider an acquisition by Google/Facebook/Microsoft/Amazon at a good price to be a "successful exit" and will explicitly go over those possible scenarios with the founder.
But there are other motives behind exploring the acquisition scenarios:
1) VC is actually asking in a more roundabout way if the founder has an answer for the above giants cloning the feature and rendering his startup obsolete
2) VC wants to gauge founders' openness to sell to earliest buyer or has plans to stick it out and stay independent until the end
I don't think Sequoia VC is complaining too much that WhatsApp never went to IPO. They still got a good return when Facebook bought it.
Also, I don't think VCs are actually that single-minded about IPO-or-else... especially for SaaS/enterprise type of startups. They will tell the founder that the more likely exit scenario is a bigger company acquiring them. This is not a big secret.
Re: What I look for in a pitch
#15The cynicism in this thread makes me feel a little more confident that even if there was a bubble, its going to deflate, rather than pop.
A theory of mine is that really what we're seeing is a change in attitude about corporate governance and business building as the VC money from outside the SV bubble becomes increasingly relevant.
Discussion of founder-friendliness recently seem to back that up in my mind. If FF attitude is going away, it is because of declining influence of the SV venture crowd controlling the narrative about their own special sauce and the right way™ to form a company.
Increasing diversity of LPs and VCs from outside SV are bound to have an effect on the attitudes toward companies being founded. Posts like this seem like justifications for existing behaviors, rather than a playbook based on any evidentiary burden.
Re: What I look for in a pitch
#16There 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.
What they actually look for is momentum and all these conditions are 'bent' when that weird FOMO feeling takes over. Yup, this exactly. MAYBE your team matters depending on who you are talking with, but if some VC gets a whiff that you have 2MM users, are growing 5x MOM for the past 6 months with 1% churn and high engagement they will literally hunt you down to throw their money at you.
Yup. VC's are in the game to money. I felt the article was promoting himself as different and unique...
Re: What I look for in a pitch
#17The cynicism in this thread makes me feel a little more confident that even if there was a bubble, its going to deflate, rather than pop. A theory of mine is that really what we're seeing is a change in attitude about corporate governance and business building as the VC money from outside the SV bubble becomes increasingly relevant. Discussion of founder-friendliness recently seem to back that up in my mind. If FF at…
The average person in SV is a cynic but the average dollar is metered by VCs.
Re: What I look for in a pitch
#18There 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.
What they actually look for is momentum and all these conditions are 'bent' when that weird FOMO feeling takes over. Yup, this exactly. MAYBE your team matters depending on who you are talking with, but if some VC gets a whiff that you have 2MM users, are growing 5x MOM for the past 6 months with 1% churn and high engagement they will literally hunt you down to throw their money at you.
Can confirm. And they'll call you on your personal cell. VCs are tracking us just as much, if not more, as we are tracking them.
Re: What I look for in a pitch
#19I read that page as "Here are a bunch of reasons why our answer might be no. Don't do this stuff. Don't talk to us if you haven't figured out these basic issues." It's not about how to get to yes. It's about how to get past no.
You get to yes by already being pretty successful, or for complicated subjective reasons that add up to apparent promise.
Re: What I look for in a pitch
#20The link to the Blitzscaling[1] article interviewing Reid Hoffman is a nice read. Good comparisons how Microsoft / Amazon / Google scaled up in terms of company org and even more insight with PayPal's customer service growth outside of Silicon Valley.