Possible reasons why you’re not getting the response you hoped for from VCs.

  1. The entrepreneur doesn’t have a unique vision for capturing a multi-billion dollar market. You can have the best business in the world but without room and talent to go big the fundraise is dead in the water.
  2. The entrepreneur hasn’t demonstrated potential to grow revenue at 3X annual for at least two years. Getting to unicorn status isn’t really even enough. To work as a VC investment, a company needs to achieve unicorn style returns before the end of the fund’s lifecycle which is usually within 7 to 10 years of initial investment. Check out this article by an investor at Battery, Helping Entrepreneurs Achieve the Triple, Triple, Double, Double, Double to a $1B company, to dig deeper into an example VC company trajectory.
  3. The entrepreneur hasn’t proven their team is the best in the world working on their problem. Realistically, the top 5 to 10 teams working on something will get funded since not every VC can get into the #1 company otherwise they would. VCs you pitch can snap a finger and connect with any teams from Stanford, Harvard and MIT working on your same problem so there is no room for B players in VC.
  4. The entrepreneur elects to pursue a business outcome incongruent with the dynamics of a venture fund. This could be that the entrepreneur wants to optimize for financial freedom with a $20M exit in a shorter time-frame than when a company is venture backed. It could also be that company’s vision doesn’t involve hyper-growth, rather it is built for a more strategic and sustainable impact.
  1. Revenue-based Financing
  2. Shared Earnings Agreements
  3. Crowdfund
  4. Grant Funding
  5. Tax Credits & Incentives
  6. Joint Development Agreements

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store