Critical Factors for Obtaining Venture Funding
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Sometimes there is nothing more powerful than the passion and vision of an entrepreneur. But sometimes passion and vision are just not enough. It helps to understand the criteria that venture capital firms use to decide which companies to fund.
Some venture capital firms and corporate investors have very narrow criteria—specific technologies at specific stages in specific regions of the country. Others have broader criteria and invest across many technology sectors and geographic locations.
But all investors look for certain critical components in an early-stage company. Below is a brief summary of these critical criteria. If you meet these criteria, you may be able to continue to the next step in the venture financing process. If you don’t, you are likely to receive a polite note passing on your opportunity.
1. Compelling Idea
3. Market Opportunity
5. Competitive Advantage
6. Financial Projections
To secure venture funding today, you need an excellent grade in all seven areas, and an A+ in at least a couple. It’s a tough environment out there, so don’t waste your time with a story that is not compelling and credible.
At Garage, we would love to help and support all visionary, passionate entrepreneurs. Of course, we can’t work with everyone. But if you have the elements for success above, we would like to get to know you better.
If you have any questions about this article, or about Garage, you can contact Bill Reichert, Managing Director of Garage Technology Ventures (email: firstname.lastname@example.org).