After receiving initial seed or friends and family funding to build your offering and gain initial customers, you are ready to attract your next round of venture investment. US investors, which account for nearly 70% of the total global venture capital, may seems very attractive to you; however, they receive thousands of business cases and hear hundreds of pitches each week…
If you have the opportunity to pitch to or meet a VC in the US, it is critical that your presentation demonstrates that you are:
* Experienced in building a successful company
* Bringing forward low risk opportunity that can deliver a high return within 3-7 years
As the US investor listens to your pitch, you should be aware that he or she will be listening for:
* Opportunity for profitable return with minimal risk… You need to demonstrate there is real financial benefit at exit.
* Revenue – a strong and sustainable revenue stream.
* Profitability and/or a clear path to breakeven.
* Does the company / offering solve a real, recognized customer problem?
* Self-awareness of founder – is he / she able to build team to complement own skills, is she / he open to feedback and willing to test a variety of product concepts and paths to market to achieve success?
* Viable market size to drive a profitable return – tampered with credibility of the company’s ability to capture an acceptable share of the total addressable market.
* Founders’ domain expertise and experience (along with network and knowledge of the target customers and their issues).
* Has the leader / entrepreneur and this team successfully built a company and had a lucrative exit in the past?
* Possible synergy between this company /idea and others in their portfolio.
* Ways to balance profits and losses in the portfolio ie if this is a new fund or one that has had a lot of success, investor may be willing to take on a more risky company than if more mature fund with limited successes.
Gaining investment from US investors can provide power and substance for long term growth. However, attracting interest and funding requires preparation, practice and insight into the specific interest areas for each person to whom you pitch.