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most people have no idea what VCs look for
i certainly didn’t
then i founded a startup and raised $12M from @a16z
here are 9 essential things to get across when raising VC money:
i certainly didn’t
then i founded a startup and raised $12M from @a16z
here are 9 essential things to get across when raising VC money:
@a16z 1/ a big vision
VCs know 90% of startups fail
each investment is a risky bet but a small number will return 1000x
founders should focus on how big the opportunity is rather than much of a sure thing it is
VCs know 90% of startups fail
each investment is a risky bet but a small number will return 1000x
founders should focus on how big the opportunity is rather than much of a sure thing it is
@a16z 2/ a growing market
some markets are growing faster than others
a VC's job is to pick which ones will vs won’t
this is why web3 has attracted so much VC money
founders should make it clear that their market will continue to grow quickly
some markets are growing faster than others
a VC's job is to pick which ones will vs won’t
this is why web3 has attracted so much VC money
founders should make it clear that their market will continue to grow quickly
@a16z 3/ the right timing
VCs use broad trends to judge whether users are ready for your product
being early is just as bad as being late
vine was early but tiktok is a $100 billion company
founders should make sure they’re going after trends that VCs are excited about
VCs use broad trends to judge whether users are ready for your product
being early is just as bad as being late
vine was early but tiktok is a $100 billion company
founders should make sure they’re going after trends that VCs are excited about
@a16z 4/ a unique insight
VCs want to make asymmetric bets
they want to see a founder who’s zigging while others are zagging
founders should communicate that they understand something that’s not well understood
VCs want to make asymmetric bets
they want to see a founder who’s zigging while others are zagging
founders should communicate that they understand something that’s not well understood
@a16z 5/ early traction
VCs want to see that startups are solving a real problem
this can be through either usage or testimonials
@rahulvohra says 40%+ of your users should be “very disappointed” if your product no longer existed
founders should build something people actually want
VCs want to see that startups are solving a real problem
this can be through either usage or testimonials
@rahulvohra says 40%+ of your users should be “very disappointed” if your product no longer existed
founders should build something people actually want
@a16z @rahulvohra 6/ a moat
what makes your company unique and defensible?
it’s a bad signal if a customer can get the same product / service elsewhere
ideally, network effects mean the experience improves with each new customer
VCs love moats that come from network effects
what makes your company unique and defensible?
it’s a bad signal if a customer can get the same product / service elsewhere
ideally, network effects mean the experience improves with each new customer
VCs love moats that come from network effects
@a16z @rahulvohra 7/ a good reputation
chances are VCs will do reference checks on you before they offer to invest
a positive reference will go a long way and signal that a founder will be able to hire good people
founders should be sure they have good relationships with past coworkers
chances are VCs will do reference checks on you before they offer to invest
a positive reference will go a long way and signal that a founder will be able to hire good people
founders should be sure they have good relationships with past coworkers
@a16z @rahulvohra 8/ relevant experience
founder market fit may be more important than product market fit
experience = speed and speed is the number one advantage startups have
founders should solve problems that they understand well
founder market fit may be more important than product market fit
experience = speed and speed is the number one advantage startups have
founders should solve problems that they understand well
@a16z @rahulvohra 9/ inherent passion
VCs know startups are hard
they’ve seen founders burn out
founders should demonstrate that they care deeply about the problem they’ve solving
VCs know startups are hard
they’ve seen founders burn out
founders should demonstrate that they care deeply about the problem they’ve solving
@a16z @rahulvohra if you're a founder or engineer building something big then apply to @launchhouse
we're a community of vc-backed builders with:
- cohort-based courses
- coliving retreats
- peer groups led by coaches
- fundraising support
- and more
apply 👇 www.launchhouse.com
we're a community of vc-backed builders with:
- cohort-based courses
- coliving retreats
- peer groups led by coaches
- fundraising support
- and more
apply 👇 www.launchhouse.com
@a16z @rahulvohra @launchhouse interested in learning more about what founders need to know to grow their startup?
then follow @callmehouck
i post 1-2 threads each week on how to succeed as a founder
then follow @callmehouck
i post 1-2 threads each week on how to succeed as a founder
@a16z @rahulvohra @launchhouse tldr, you want to show VCs that you have:
- a big vision
- a growing market
- the right timing
- a unique insight
- early traction
- a moat
- a good reputation
- relevant experience
- inherent passion
- a big vision
- a growing market
- the right timing
- a unique insight
- early traction
- a moat
- a good reputation
- relevant experience
- inherent passion
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Benedict Evans @benedictevans
·
Jun 29, 2022
Good summary