Venture Capital Strategy: How to Think Like a Venture Capitalist

“value proposition.” It is not good enough to be clever or novel. An idea must somehow make the world a better place. It must change the world for the better. However, this needs to occur in the context of a world that hates change.

The answer is that both numbers are negotiated and are influenced by a variety of factors, some driven by the startup and its needs, and some by the VCs and our needs.

It is most important because it guarantees the VCs the right to continue to invest in a startup as it grows.

explore product/market fit, we are going to deconstruct Marc’s definition into three key questions about a startup: How are we solving customers’ problems?Value Proposition Are there enough customers out there? Market Size Can we prove that customers really want it?Traction

how easily other companies might enter the market, whether there are other types of products that could solve this problem and the relative power of buyers and sellers.

1. the need for cash to grow; and 2) the desire to avoid dilution.

The best tool for estimating exit valuations is identifying comps, or comparables: other startups that have already exited.

VC firms often come together in a deal by syndicating, meaning having multiple VC firms participate in an investment round.

signal. Founders may be in business for the wrong reasons or be pursuing the wrong objectives.

In venture capital, new shares are created by the startup and sold to VCs with the cash going into the bank account of the startup. This means that the pool of stock has increased, thereby diluting the ownership of the founders and early investors.