How to Approach VC Firms About Investing in a Startup Studio
When you wish to pitch a startup studio to venture capitalists, you need to have the right approach to ensure success. Understanding your potential business endeavor and knowing your audience is vital when you wish to secure funding. There are a couple of things you can do before you approach a VC firm to give you the best chance of success. There are a couple of tips below to help you.
How to Approach VC Firms About Investing in a Startup Studio
1. Have a Good Business Idea
By now, venture capitalists have heard every idea under the sun. They know what types of businesses are going to work and what types of businesses will fail within the first year. This is why having an idea for a scalable, profitable startup is essential when you wish to secure funding. VC firms don’t want to fund a business that isn’t going to be worth the investment for years to come.
2. Find Appropriate Investors
Don’t start pitching every VC firm under the sun when you wish to secure funding for your startup. Instead, find the right kind of investors for you. Some firms want to work with unique businesses that can offer the world something that nobody else can—businesses that celebrate their quirks and let their personality shine through their branding.
Other VC firms may only wish to work with bland, corporate businesses with no true personality, and others may specialize in working with only specific types of businesses. Focus on pitching firms you believe are a good fit for you and your business.
3. Don’t Neglect the Market
One mistake startups make when approaching VC firms is focusing only on their product. They talk about how wonderful their product is, how there’s nothing else like it, and how the firm should definitely invest in this one-of-a-kind, groundbreaking idea. This is a terrible approach. Instead, a VC firm wants you to focus on the market.
How does your product serve the market? How will it continue to serve the market with time? How are you going to adapt this product as the market’s needs change? It’s the customers that will make or break your startup studio and idea. You could have the best product in the world, but it’s no good if there’s no market for it.
4. Know Your Numbers
Many people with startup ideas aren’t business-minded, and they expect their investors to do all the work for them. You should never have this expectation. You need somebody on your team who knows what they’re doing business-wise. You should have 6 to 12 months of financial projections and evidence to back up how you’ve come up with these numbers. You need business-minded people on your team if you want to have any chance of succeeding.
Know who your product is for, know what kind of people you’re pitching to, and know where your business will be in 6 to 12 months if you secure funding.
