This article originally appeared on businesscollective.com.
Make no mistake—pitching your startup to investors is tough. You may think your company is the next big thing, but so do a lot of other founders. And just like you, they’re keen to get their hands on venture capital.
How do you stand out? Having a unique product is a no-brainer, but a successful pitch relies on a lot more than that. To gain the advantage over other startups, you need a deep understanding of your market, a proven business plan, and a strategic plan for targeting venture capitalists.
What Matters to VCs
There are three standard areas investors look at when evaluating an investment candidate, and you need to make a compelling case for your company in each one.
- Market size: Venture capitalists want to find the next unicorn, and even really great businesses often fall short of that $1 billion mark. If you want to make investors sit up and pay attention (and give you their money), show them that your company has room for exponential growth. Explain how you’re going to disrupt your market and how long it will take you to do so.
- Product differentiation: Startups face so many early challenges to profitability — such as a lack of capital and brand recognition — that good investors only want to see products that already have “rabid demand.” Your company must excel at what it does by offering a service or product that customers can’t get anywhere else. At FormSwift, for example, we provide a complete document creation and editing solution, which sets us apart from companies that only focus on one aspect of that process.
- The team: Successful companies begin with strong leadership. You need smart, charismatic personalities who can generate audience enthusiasm for a product and contribute unique, effective ideas. Ask yourself what conflicts could arise between you and your executives, then devise a strategy for resolving them. Investors want to know who’s running your business and how well you manage your team.
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