Venture Capital has its pros and cons–raise money and you give part of your company away and depending on the VC, this can often lead to them subjecting your company to scrutiny and outside oversight, not to mention a board seat or two. While these cons are indeed daunting, they give you money to grow your team, build your product, scale up sales and operations and more.
So while it’s tempting to accept any money that comes your way, it’s important to think heavily about these five concepts first:
1. Does the VC bring domain expertise in your type of business
- Finding a VC that’s skilled and knowledgeable in your area of expertise and industry is always beneficial.
2. Does the VC respect your startup timeline
- While communication with your investors is always important, respecting the need to be patient and for time to focus on building your startup over managing VC stakeholders is a good quality for VCs to have. Patience is indeed a virtue here.
3. What’s the caliber and expertise of the VC’s network
- Getting a well-known venture capitalist with great connections is always a bonus.”It’s not just what you know, but who you know” holds very true in this case, and social capital is key along with cash Having great connections can often attract brilliant individuals as partners, customers, investors or employees.
4. Understanding that they won’t be the only ones coming through your door
- If the VC understands and respects your equity resources, then they’re definitely a keeper. Often times startups reserve shares for later rounds of funding, so finding a VC that acknowledges your drive for further growth is beneficial.
5. Types of startups funded and success rate
- A track record investing in successful reputed startups with favorable exits is key.
With this in mind, our team has formulated a list of 100 VC’s you can trust. While not each one will be a good fit for your startup, each of these VC’s carry a respectable reputation within their industries. With several years of experience each, the number of successful startups they have invested in are staggering, with a combined $250B in funds managed.