Next week @Start\UP bootcamp, we’re going to be looking at strategies and plans for getting investment. Of course, a significant proportion of that will be what VC’s are looking for in a company and business opportunity, but equally, we will be covering what a company should look for in a VC. In most cases I preface the following comments with “if you have a choice”, but “if you have a choice in which VC to take investment from” then it’s important to do as much due diligence on the VC as they will do on you. A relationship with a VC if like a marriage, except its usually easier to get out of a marriage!
I strongly recommend that startups dive into the VC’s web site. It’ll give the “nut’s and bolts” – things like investment philosophy, industry/sector focus, stage and typically round size. It’ll have a list of active and past portfolio companies, and usually the resumes/CV’s of the partners.
But that’s all the “selling side” of the VC. It’s best to dig into the “buying side”. What do founders in the portfolio company think, was it a good, bad or ugly experience. Are there biases, preferences? Landmines to avoid?
There’s a interesting “reputation” web site – www.thefunded.com – that provides a vehicle for anonymous feedback from founders, both those that were funded and those that were rejected. Typically, it’s usually the dis-satisfied that are the most vocal, and this site has had its fair share of “VC arm twisting” to get their reps up. But it DOES have feedback on a number of Irish and Northern Irish funds (Crescent Capital, Enterprise Equity (Irl and NI), ACT, QUBIS). There may be some value in the comments.
In the interest of help startups make a decision “if they have a choice”, I’m looking to start a “form guide” on Irish and Northern Irish VC’s, something a little more objective that typically “bitching”. I’m looking for considered feedback for anyone who has experience with (good or bad) any VC on the island.
Here’s my initial thoughts on the questions I look for opinions on
(all answers on usual scale 1-5, 1 is low/bad, 5 is high/good)
1. How responsive were they? (Returning calls)
2. Did they respond when they said they would?
3. Did they make decisions quickly?
4. Do they have operational experience (P&L) to offer?
5. Have they been part of a startup?
6. Have they had an executive position in a multi-national corporate?
7. Have they invested their own money?
8. Did they inspire confidence that they could add value to your startup?
9. Did they encourage or discourage you?
10. Would you take them for a drink, socially?
Please let me know if the answers to these questions would help budding entrepreneurs evaluate VC’s – “if you have the choice”.
Why not try. .. .. forgetting the whole VC perspective thing, and try working on the ‘what makes a good business’ thing.
Here’s an idea for for you. Why not invite a VC into your cult and ask them.. .. ‘what is it that a VC looks for in a possible investment?’
You hot two important, and timely items.
1st. The theme of this bootcamp is exactly that. We’ve discussed a couple if times that “operational readiness” Is one of they key attributes of VC interest. Other key attributes being the ability to return (enough) from the deal.
2nd. What a VC looks for in a business, is covered specifically on Wed, although we’ve already mostly nailed VC fund arithmetic and valuations.
1st. The theme of this bootcamp is exactly that. We’ve discussed a couple if times that “operational readiness” Is one of they key attributes of VC interest. Other key attributes being the ability to return (enough) from the deal.
+1