6 REASONS WHY VENTURE CAPITALIST REJECT A GOOD STARTUP

THIBAULT MATHIEU

Execution is key to a good business idea, but so

are sales

Always a plus when your business owns something

proprietary

Still as entrepreneurs try to grow their great

business idea, they need the help of others

Thats where venture capitalist come in

1) You Need More Traction

Many times a VC will tell you they

need to see more traction in order

to believe in the evaluation you are

looking for an investment at

Your company needs to have

been doing what they’re doing for

sometime at a competitive rate.

Sometimes traction can mean they

need to see more sales.

Without enough sales, you have

not proven the market

2) We Have A Competing Portfolio Company

In picking startups, VC’s

have to be very wise

Don’t want to invest in a dud

You also want to make sure

the company you invest in is

the company in that industry

that you want to invest it

Can’t bring competition to

industry you are already

invested in

3) You’re Too Late

Many different trends come

and go

Sometimes that could be

why you don’t get an

investment from a VC

Sometimes if you can’t get

your business to a certain

stage to stay ahead of the

trend curve, you’ve lost.

4) You’re Too Early

Sometimes if an idea has not

been proven yet, an investor

does not want to take such a

risk on the possibility that this

is the new trend

What will happen is they wait

it out or leave it to research to

prove its existence

Have to move along if this is

the case

5) You’re Too Expensive

A business owner takes pride in

what they have accomplished in

putting together a business

Sometimes that can get in the way

of getting an investment

So when you’re asking for X and

the investor is offering Y, you can

be at odds ends

You have to be willing to negotiate

down sometimes even if you think

your business is worth more

6) We’re Unsure

VC’s are not perfect

It could be an industry they

are not familiar with or they

may not fully understand the

business and the projected

growth rate

They may stall in order to

figure things out. You need

to move on or risk getting no

investment