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.

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.

COMPELLING IDEA

Every entrepreneur believes his or her idea is compelling. The reality is that very few business plans present ideas that are unique. What makes an idea compelling to an investor is that it reflects a deep understanding of a big problem or opportunity, and offers an solution. This is the starting point for getting venture investors interested, but it is not sufficient. You have to possess the rest of the ingredients below.

TEAM

You may have a great idea, but if you don’t have a strong core team, investors aren’t going to be willing to bet on your company. The founders have to have the credibility to launch the company and attract the world-class talent that is needed to fill the gaps. The lone entrepreneur, even with all the passion in the world, is never enough. This is where we can help by providing what you need.

MARKET OPPORTUNITY

Venture capital is focused on businesses that gain a competitive edge and generate rapid growth. You should be targeting a sector that is not already crowded, where there is a significant problem that needs to be solved, or an opportunity that has not been exploited, and where your solution will create substantial value. It’s not about how big the market is; it’s about how much value you can create.

Every interesting business has competition. Competition is not just about direct competitors. It includes alternatives, “good enough” solutions, and the status quo. You need to convince investors that you have advantages that address all these issues, and that you can sustain these advantages over several years.

VALIDATION

Do you have an advisory board of credible industry experts? Do you have a co-development partner within the industry? Do you have beta customers to whom investors can speak? Do you already have paying customers? The more credibility and customer traction you have, the more likely investors are going to be interested. We provide assistance with all of these if you idea is right for all of us.