How to get VC funding

Businessweek posted today an article by By Vivek Wadhwa about “15 Things You Need to Score VC Funding“. Its interesting reading. Because as an entrepreneur you sooner or later has to make that decision, and few realize what it means. I don’t have any experience myself but according to Vivek Wadhwa: “VCs can be the best thing that happened to your company or your worst nightmare”.

10 things needed that are mentioned in the article are:
1. Market-ready product
2. Solid business model
3. Brilliant business plan
4. Management team
5. A clear and well-defined exit strategy
6. Board of directors
7. Detailed financial reporting
8. Succession plans
9. Stock option plans and structure
10. Intellectual-property protection

The final five things what the VCs’ are going to check up on you in due-diligence process:

1. Management references and background checks
2. Customer references
3. Analysts
4. Employees/ex-employees
5. Competition

When I was in Shanghai this june I met a VC and had a little chat. What I understood from him it is all about the people. His work is mainly to go out and meet them, talk to them and get an impression. Not that much about the business plan or numbers. Thinking about how often the business idea changes and that it in the end often is something completely different from what you started out with, you realise that it is all about the people and not the idea.

In the startup I am now, we are not in the phase to look for VCs. We need of course money but we are looking at other options firstly. As I wrote in another posting we hope to find customer finance or run a pilot project.

~ by Andreas Sigurdsson on August 2, 2006.

2 Responses to “How to get VC funding”

  1. Isn’t it Business Week and not Google that has posted the article?

  2. Of course it is Businessweek! Apperently Google is so successful in their branding I have difficulties to get them out of my brain 🙂 Sorry about that. Thank you for commenting on it.

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