Venture Capital Strategy: How to Think Like a Venture Capitalist

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

we find the most attractive founders are somewhat indifferent and never desperate.

VCs may begin imposing strategic direction toward becoming the perfect acquisition target while founders are focused on creating the most sustainable company.

The founders will own a smaller percentage of a larger pie as a result of the pool being diluted by the new shares. The founders’ 100% ownership pre-investment will be diluted by the creation of new shares, not by selling off some of their pre-existing shares.

For traditional businesses, this could be reworded into the objective: to grow and profit. It turns out that those two outcomes, growing and profiting, are in conflict, and for venture-backed startups, the latter half of the goal (to profit) may not even be necessary.

startup could be addressing a compelling market need, have the right team in place in an attractive industry, yet still the math might not work.

This can be a challenging aspect of the job for young VCs: pushing back on the founders’ ideas about which customer segments to target. A surprising number of early stage startups are not sure (yet) which market they should go after. In fact, this can be the source of great conflict. Agreeing on which markets to pursue can be an important part of t

We are really talking about two separate goals. First is nailing the niche, addressing the needs of a small market. Second is identifying and moving into larger markets. Nailing the niche implies hyper-focus to satisfy core customers who share similar pain points.

lacks necessary granularity to explain the context for a specific startup.