What weight to different factors have in a Venture Capitalists decision to invest in your start-up company?
New research suggests the following:
30.4% – Potential Return
27% – Founders’ Experience
26.4% – Market Readiness
6.6% – Regulatory Exposure
6.4% – Social Connection with Founders
3.2% – Lead investor
…best get networking perhaps; but the potential return is still the most important, so practice your sales skills at the same time.
Above all? Make sure you’re going for a big market and have your numbers in a row to prove the zillions you’re going to make out of it.
Ironically, other data demonstrates pretty clearly that VC’s should not invest in Founders who have had a successful exit before. In fact statistically, they are less likely to provide the investor a return, than someone who has not had a big exit before.