The tools mentioned below will not only help them to rethink their strategies but will also help you as a beginner to boost the chances of your success. So here a few basic tools you need to make a strong impression in front of a VC.
Things You Need To Raise Venture Capital
- An Innovative Idea
Innovation always catches our attention, be it an innovative product or a service. You don’t need to offer something different or new - all you need is to offer a common product in an uncommon way so that it catches the attention of your prospective customers. Venture capitalists love such ideas as they can foresee huge profits. If you have such an idea, your first prerequisite is ready. Cheers!
- A Strong Value Proposition
There’s a very simple question - “Why would a customer buy your product?”. If you can justify your answer with realistic reasons and data, you are a winner! At this stage, a group of beta customers can be of immense help to you in justifying your point. Try to demonstrate properly the reason why a customer would choose to visit your shop when there are countless shops in the market offering the same product/service for years. Are you offering something unique? Have you given a new twist to an existing product to make it more user-friendly? Think about it.
- A Scalable Business
Markets keep changing with change in type of customer requirements. If you really want to thrive successfully, you need to have a highly scalable business that can grow and expand with time. Or else, it can be a golden opportunity for your competitors to capture your market.
- Other Investors
Reliability is very important in venture capital financing. VCs typically prefer to invest at later stage so to ensure that they are investing in an established business with at least one or more existing investors. For them existing investors of a startup are symbol of credibility so it becomes easier for them rely on the startup. If the startup is yours, you are lucky! Aren’t you?
These are some of the basic things without which you cannot even think of raising venture capital. There is no dearth of talent in India so the competition is also very high. Research says, out of 100 startups, only 2 or 3 manage to raise venture capital each year. So you must try your best to ensure that this time your company is also one among those 2 or 3 selected startups.
Do share with us your experiences with raising venture capital in India.
For more information, feel free to visit Merger Alpha.