The Investor's Perspective: What VCs Look for in a Startup
How do venture capitalists make their investment choices? Some of it comes down to what companies the VC investor already has in their portfolio. They might want to specialize or diversify, and startups may be able to find this out with a little research. However, regardless of industry, there are a few common factors all VC investment companies will look for in a successful startup.
A Definable Competitive Edge in Your Market
VC investors love small investments with big returns. Startups that can demonstrate features that make a solution measurably competitive have a greater chance of attracting funding.
Ensure you've done the research to be confident in a great product-market fit. You need to be able to define your target audience, their pain points, and why your app or platform addresses those problems so much better than the competition.
Consider including research from MVP users/early adopters in your pitch deck, plus factual comparisons between other services on the market.
A Clear Marketing and Branding Strategy
You can't overestimate the importance of marketing as an early-stage tech startup. VC investors will want to know your growth strategy, and both marketing and brand messaging are a critical part of that.
Make sure your pitch deck is conscientiously and consistently branded and that all your online materials match—VC investment companies will do their research!
You can discover more about branding with Arch Collective's Startup Brand Messaging 101 Course.
Financial and Growth Milestones
Your business plan must include how much profit you expect to make, by when, and how. Planning out your milestones starts with where you are now and where you expect to be in a month, a quarter, and so forth.
Back this up with current growth statistics, market trends, and supportive strategies like your marketing plans.
Final Word
Q4 2022 saw another 14% drop year on year in VC investment. The good news is that VC-backed companies still raised a whopping $32.4 billion. Give yourself the best chance of getting a slice of the pie:
Book a 15-minute introductory call.
Tell us about your project.
Let us match you up with the right marketing and branding people to get you on the path to big investments.
Need more tech startup and VC investment insights? Subscribe to Arch Collective's newsletter.
