I spoke to few VCs after their interaction with startups@ Proto, and here are a couple of candid feedbacks/observations I heard from VCs:
- VCs are looking for complimentary skills in the startup team – it’s great to have hard core techies/geeks in the founding team, but startups should also realize that they need to have people who are good at marketing/sales/closing deals/running operations etc. What’s most important is startups to acknowledge this and plan for the same. VCs may not expect you to know marketing, but they do expect you to market your product/services.
- During your ‘elevator pitch’, make sure that you know what you are saying. Know your USP, don’t throw statements like “we can develop this feature in 1 month.. scaling is not at all a problem” – Basically, if you can get everything right – what’s stopping you from kicking ass? Why are you reading this post then?
- Listen, listen and listen: You might think VCs are a snobbish crowd (because of their American accent!:)), and have no sense of understanding of the new web world. But at the end of the day, do realize that they too operate under certain constraints and are governed by few guiding principles of their organization. So, listen to what they want you to do. VCs look for people with whom they can talk, at the end of the day relationship building is very important and the easiest way to build good relationship is to keep your mouth shut.
- Articulate: By saying articulate, I don’t mean go back to english classes,but atleast answer a few basic questions in precise/simple/clear words (you wanna call it jargon!). If you are finding it difficult to answer basic questions like why will somebody use your product? Why do you think you have a differentiator? How do you define success criteria of the product? etc., your chances are bleak.
If you can’t explain to a VC in 100 words (or in few minutes), how can you explain the product to your customers? - And of course, you are free to ignore all of the above. There are people who haven’t raised funding (like Vembu of Zoho) all of their entrepreneurial life. So, decide what’s best for yourself.
These are views from an outsider – who is neither a VC, nor an entrepreneur. But a keen observer.
Great set of advices!!
I really liked the “listen. listen and listen” thing..!
Thanks for your i/ps.
Interesting observations..though all I want to add is that many a times startups have no idea on what are they trying to do. Articulating one’s ideas is very important! Should have been the topmost item.
~Satya
I think Articulating is a wrong, if not too strong, a word. What Ashish probably meant, from the examples that followed, is “Clarity”.
It is necessary for the Entrepreneurs to have a crystal clear clarity of thought.
i liked the third point the most “Listen, listen and listen: ” so very often i meet folks who believe that being a fast talker is all it need to do well in business [specifically sales ] . Being Aggressive is not always advisable . sometime you need to ask right Questions and shut up .
Hey Raseel – Yes you are right – All I am referring is for startups to be clear and precise about their offering..
Its like this – Can a startup sell the idea in 100 words? (instead of blabbering for an hour?)
In general, the first few minutes of the conversation is all a startup will have to put forth their USP, and if they take an hr to say the same, its a blaahhh!
Another Keen observer’s observation:
Complimentary Skills – Yes they do look for it but mind, it should be just right in number & also it depends on case-by-case basis i.e. it depends on if you are strict research technology company or market driven technology company. Having these skills very much right in number is quite important else be ready to give an axe to that extra employee which your VC might term as redundant (Doesn’t matter how good a buddy is he yours!).
Smart observation, I must say. Yes, the number is important and at the same time, I know a startup where nobody wants to code, everybody wants to get into biz dev!!
Point I am trying to make is – a startup would need ppl with all sorts of skills – to cross the chasm!.
Doesnt matter they have it or not – what’s really important is do they acknowledge the importance of these skills?
I was surprised to see few startups not even ready to acknowledge that (and few VCs were really pissed off with this!)
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