What is a venture capitalist looking for?
The strength of a company’s management team can be more important to a venture capitalist than the company’s product. This year’s most promising product may be eclipsed by next year’s new technology, but a good management team can foresee and work through such difficulties. A venture capitalist wants to see a capable, committed set of managers who are adaptable and comfortable with growth and change. A venture capitalist is always looking for a high rate of return. The earlier your company is in its business cycle, the higher that rate will have to be to compensate the venture capitalist for his or her risk. This means that the company must be positioned for rapid growth, in terms of both management and product. A venture capitalist also wants to see a realistic set of financial projections and requirements. He or she will take a conservative view of your company’s chances for profit and success. It is helpful to emphasize financial requirements for this stage in your company’s growth.
