Great advice form Janis Skutelis who is a founder and partner at FlyCap and also one of the TechHub Riga Office Hours mentors. He gave us some specific points on how to attract investors attention to your product.
10 points in pitch to succeed with VC
BUSINESS AND TEAM QUALITIES
Your business solves certain market problem.
We do not like business models based on advetising revenues. Nor do we like business ideas that give just tiny additional nice feature that competitors do not have yet, but might introduce easily. It is better when your product is more like “Aspirin” (meaning solving some pain) rather than vitamin. E.g. Uber or Taxify is solving now many problems at the same time. RCG Lighthouse is generating savings to businesses at no extra cost or hastle, everything is done by RCG team.
What do you have that others don’t that will make you succeed? Very high profile programmer or sales person, highly useful contacts, lower cost of product, better service, patents, strong brandname or super high speed of execution? We appreciated that Mailigen was Nr. 6 in the Top10reviews.com, ahead of many global players in email marketing.
Which is you have paying customers, say at least EUR 1000 per month and increasing every month. Proven business model.
Global business from day one.
We don’t like this approach “Let’s first test in Latvia”. What works in Latvia may not work elsewhere. Getting foreign clients is the hardest part. When we ourselves approached Mailigen, they had clients from more than 90 countries. We also love Airdog and we love Molport for the fact they have orders from all around the world.
Having experience in the sector, honesty and transparency, seeing real passion and willingness to work in the evenings, in weekends, when travelling and full time commitment of the key team members being CEO, CSO (sales) and CTO (technology). Everyone on the key team should be fully devoted, no other projects or employments.
Fast response to VC fund questions mean you are fast in execution and know your business. Most of our investees replied to us within few days and sometimes within few hours.
Detailed and researched bussiness plan and answers to our questions.
Available validated world market data and competitor data. Good understanding of customer acquisition costs and well planned sales strategy. We are disappointed to see when entrepreneurs mention mainly direct selling and social channels. That is poor preparation. We want to see more creative approach.
“Raising Venture Capital is like a marriage” which means positive, friendly and constructive dialogue, answering patiently, if necessary, 100 questions.
Presenation with modern design and full of interesting data and good judgement. Not too short and not too long, right to the point and no bullshit.
Skin in the game
We prefer teams that have invested own money. That means they will not jump the ship at the first difficulties. We like people who know how to save money rather than asking huge salaries before any results delivered.