Venture
Capital checklist

Venture
Capital checklist

A Venture Capital (VC) fund invests money into a company for an equity stake in the business. A VC fund can help early-stage ambitious companies reach their growth ambitions.

The journey to securing VC is about proving that you understand your business and your unique selling proposition (USP). This checklist can help you navigate some of the common pitfalls, as well as understanding whether the process is achievable for your business – before you start.

<p>A Venture Capital (VC) fund invests money into a company for an equity stake in the business. A VC fund can help early-stage ambitious companies reach their growth ambitions.</p>
<p>The journey to securing VC is about proving that you understand your business and your unique selling proposition (USP). This checklist can help you navigate some of the common pitfalls, as well as understanding whether the process is achievable for your business – before you start.</p>

A Venture Capital (VC) fund invests money into a company for an equity stake in the business. A VC fund can help early-stage ambitious companies reach their growth ambitions.

The journey to securing VC is about proving that you understand your business and your unique selling proposition (USP). This checklist can help you navigate some of the common pitfalls, as well as understanding whether the process is achievable for your business – before you start.

Please note

This checklist is not part of an application process for Venture Capital. However, we hope it gives you an idea of what is involved and what you need to do to prepare. Investors may ask for more or less information about your business and the finance you need than what is set out below. This will change depending on individuals involved.

STAGE 1: Getting prepared

What should you be asking for? How much money do you need? How much dilution will you accept?
These are big decisions that should not be taken lightly. Do you understand how the process works? Are you comfortable having a Venture Capitalist in your business? Do you understand that you may have to give over significant control of the business?
Have you researched firms who have worked with similar businesses? Have you spoken to entrepreneurs who’ve been through the process?
It’s a good idea to get out there and try to sell your company. Get out and talk to investors at networking events and VC initiatives to better understand the landscape.
Sometimes current investors – like Angels – can facilitate an introduction to VCs.

STAGE 2: Choosing the firm

Do your due diligence on the firm – they might have a say in how your company is run. Who are the firm? Who have they invested in before? What are their value-adds?
Do you lack any strategic expertise? Could your Venture Capitalist plug that gap?
Are your outcomes aligned? Do you share the same vision for your company?
This person will offer you help and support and may even sit on your board. Would you be comfortable spending a lot of time with them or having a difficult conversation if you need to?
Most funds have an investment thesis and focus on key trends. Do you fit into these?

STAGE 3: Preparing for the pitch

If an investor wants to meet, they’ll expect a 10-12 page pitch deck. This should include information on your team, strategy, competition and investment terms. It should be a talking aid, so doesn’t need to be your full business model.
Can you show a gap in the market? Can you explain the opportunity and how you plan to capitalise on it?
Have you explained how you understand the market? Your competition? Why your proposition has the potential to be successful?
Investors expect entrepreneurs to really demonstrate their handle over the business. Do you have the evidence to back up your statements? Can you show how you’ve tested the market or validated demand?

STAGE 4: Thinking ahead to the deal

You need to have some money available to pay legal fees.
Some funds are happy to invest multiple times in what are known as rounds. The sooner you can share your long-term growth plans, the better.

What's your next step?

What VC firms are looking for:

  1. Passion
    Your passion as an entrepreneur and your conviction, determination and drive to build the business.
  2. Competence
    Your understanding of the business plan and the substance behind it all.

Your approach should include a mix of the two. If there’s too much passion and it ends up being a sales exercise, that can be off-putting for VCs. If there’s not enough substance, it will fall over as well. Strike the balance.