Three things matter most to investors. THREE. You read a ton of content about validation, MVP, customers, revenue, etc. All of those perspective are platitudes; they’re meant to inspire you that you CAN or teach you how you MIGHT.
End of the day, three things matter, period:
- Outcome. Can this exit? Will it? No ROI for investors, no investors.
- Competitive Advantage. Can you develop and maintain a market? If you lose to competitors, no investors.
- Team. When all else fails, this can overcome the challenges in the first two cases.
So, how are startups able to attract huge amounts of venture capital investment even when they are in the beginning or a nascent stage?
They work backward.
An experienced, invested, passionate, committed, and capable team is in and of itself fundable.
These are, despite what most want to think, incredibly rare. Most founders want to retain most of the company, do it themselves, or let their ego get in the way. Most startups are tech founder heavy and have no one running marketing and business development. You might as well go home.
Working out a competitive advantage starts and ends with Marketing. Roughly .00000% of all pitches I heard have a solid understanding of their market and competitors. Most competitive analysis (analyses? analysesises?) are a joke.
If your competitors will be you, you lose. Period.
WILL you exit? Not could you. Not “we have options.”
Do you intend to, is it possible, and are you chasing that? If no, find other sources of capital.
One is critical. Two is largely dependent. And with three, we can find our way to one and two.