Secured $12 million led by a16z; project founder reveals how to win over VCs?
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Secured $12 million led by a16z; project founder reveals how to win over VCs?
9 Essential Things to Know When Raising VC Funding.
Navigating Web3 tides with focused insightsWritten by: Houck
Translated by: TechFlow intern
Most people don't know what VCs are looking for—and neither did I. So I started a startup to find the answer, and successfully raised $12 million from firms like a16z. Here are 9 essential things you need to understand when raising VC funding:
1/ Grand Vision
VCs know 90% of startups will fail. Every investment is a risky bet, but a few will return 1000x. Founders should focus on how big the opportunity is, not how certain it is.
2/ Rapidly Growing Market
Some markets grow faster than others, and it's the VC's job to identify and invest in those that are accelerating. This is why Web3 has attracted so much VC capital—founders should clearly demonstrate their market will continue growing rapidly.
3/ Right Timing
VCs use various trend indicators to assess whether users are ready for your product. Timing is critical. Vine was too early, but TikTok became a $100 billion company. Founders should ensure they're targeting trends that excite VCs.
4/ Unique Insight
VCs look for asymmetric bets. They want to see innovation and differentiation—they want something they understand, but haven’t seen before. Founders must communicate such unique insights.
5/ Early Traction
VCs want to see that the startup is solving a real problem. @rahulvohra says over 40% of your users should feel “very disappointed” if your product disappeared. Founders should build something people truly want.
6/ Moat (Sustainable Competitive Advantage)
What makes your company different and defensible? If customers can get the same product/service elsewhere, that’s a red flag. Generally, VCs favor startups with a strong moat.
7/ Strong Reputation
VC firms may conduct background checks before investing. A solid reputation helps significantly, signaling that the founder can attract top talent. Founders should maintain good relationships with former colleagues.
8/ Relevant Experience
Founder-market fit may matter more than product-market fit. Experience = speed, and speed is the startup’s primary advantage. Founders should tackle problems they deeply understand.
9/ Inherent Passion
VCs know startups are hard. They’ve seen founders burn out. Founders must show genuine passion for the problem they’re solving.
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