A quick reminder what venture capital is all about

We frequently question ourselves and the track we’re on. Are we making the right investments?

The ideal venture investment has a few characteristics:

  • perfect team

  • product / market fit

  • significant growth

  • meaningful monetization

  • potential to be a category leader in a very large market

  • capital efficient scalability

  • reasonable valuation

  • a great syndicate

  • fits your investment thesis

There are many more but you get the drift.

But venture capital is when 3, if you’re lucky maybe 4, of the points above are fulfilled when you invest.

That’s why success rates are so low and returns are so high when you do get it right. That’s also why it’s a long term game and return is positively correlated with ridicule.

We have to keep on reminding ourselves of this. There are no easy answers in this business.

8 Comments on “A quick reminder what venture capital is all about”

  1. Glad to see investors realizing this – it is about sensing a good venture deal, not waiting for the ideal startups. Here is my view as an entrepreneur on how many of these points matter to investors: http://adelinapeltea.com/how-to-get-seed-funding-in-europe-not/

  2. Stefan says:

    What about pre-product-fundraising? Is it only about the team then?

  3. Asar says:

    Where can I find green business or ecology related service business interested VCs from Germany or northern EU?

  4. wmougayar says:

    Good list. How about timing?

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