Weekly 🔥 18: How do VCs choose which startups to fund?
Welcome to another edition of our new newsletter! You’ll receive the best practical startup advice straight to your inbox every week.
In this week’s edition, we share:
- How VCs choose which startups to fund.
- How you can sell your startup to VCs with a one-pager.
- Plus, a recording of our second AMA event (see below).
Let’s do this.
You won’t believe how VCs decide which startups to fund
Aaron Dinin, PhD teaches entrepreneurship at Duke. He also teaches us something new about the startup/VC world every week in his column.
This week, he shed some light on what venture capitalists might look for when they invest in a startup. In Aaron’s story of an unsuccessful attempt to woo a VC, the answer is not what you think. He didn’t care too much about the idea, or the business model, or the strategy. He cared that Aaron hadn’t failed yet:
“Wait a minute,” I said, wanting to clarify what I’d just heard. “Are you telling me you only invest in failed founders?”
“I wouldn’t say failed founders,” he responded. “The founder could have also IPO’d a company and had a huge exit. What I’m looking for, though, are people who, at some point in their careers, had the experience of launching a company that was on the path toward being successful only to have the wheels come off. Since you haven’t experienced that yet, I can’t invest in you. I’m sorry.”
Ouch.
But what this moment tells us is that failure isn’t an end. It’s a beginning. Our failures are what turn us into better entrepreneurs.
👉 Read here: A Venture Capitalist Told Me How He Decides Which Startups to Fund, and I Couldn’t Believe It
Stop sending VCs pitch decks — start writing one-pagers
What’s an investor’s most precious asset? Time. That’s why one-pagers are effective. Al Anany has worked on many one-pagers for clients who have raised more than $120 million. Here he lays out the best strategy for creating them:
- What to include: A killer one-line elevator pitch. Product picture. One paragraph describing your business. Business model. Team members. Financials (If you have traction). Market opportunity. Investment ask. Roadmap
- How will that fit on one page? It doesn’t. Next, you create Dynamic Versions based on who will be reading the pitch. Is this person finance focused? Keep only the relevant aspects. Are they interested in your mission? Create a mission-focused version. Proud of your initial traction? Showcase it in a tailored one-pager.
- Whatever you do, always remember that a one-pager is a gateway to what you are doing. It operates as a “Hello.” and only that. When the time comes, you’ll get into all the gritty details you left out.
👉 Want to know more? Steal Al’s One-Pager strategy here
Missed our AMA event? Fear not.
We held our second AMA live event last week. We had a great time answering your questions, giving out awards, watching Jon Brosio practice his golf putting, and the sea of emojis that constantly flooded the screen.
It was a blast.
We uploaded the recording to YouTube for those who couldn’t join us:
See you at the next one! (We’re hopeful it’ll be December.)
