How Do VCs Make a Decision?

How Do VCs Make a Decision?

May 12, 2020 by investor

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.

So how do VCs make a decision to invest?

Venture Capital investors make investment decisions as a group. As an associate, partner, or otherwise, you must convince the team to move forward with it.  

Even if you could make the decision alone you want buy in and support from the others as you’ll need their support to help make the company successful.

After the initial pitch to a VC investor, the startup meets the rest of the investment team and pitches the entire group.

The team decides together to pursue diligence.

With the diligence results, the team again comes together to make a go/no go decision.

The advocate for the startup makes the case for moving forward with the investment.  

It’s best to arm your advocate with enough information to make your case. 

The startup should also remember that the advocate is taking a reputation risk as well as a financial risk on the startup and that’s never an easy thing to do. 

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.
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Disclaimer:
Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.

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