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Interesting thoughts. Since you apparently have significant experience raising VC funding, I'm curious about your opinion on the following (others, of course, a
by ablekh 7y ago
Interesting thoughts. Since you apparently have significant experience raising VC funding, I'm curious about your opinion on the following (others, of course, are welcome to chime in). If you were working on a deep tech (science-based) startup and considered using venture capital, would you prefer pitching your idea(s) to VCs, who happen to have relevant domain expertise (most likely, as their educational background) due to potentially being enthusiastic about relevant domain and problems as well as having better understanding of an industry and having some (additional) connections or, on the contrary, avoid such VCs as potentially being "biased" and/or having less enthusiasm / belief in probability of solving relevant problems and, subsequently, the success of the venture? (For the purpose of this question, assume that the market need is validated.)
- staticautomatic 7y agoIf someone with domain experience thinks you can't do what you're trying to do or are doing it the wrong way: 1. They're correct and you should not get a check. 2. They're incorrect, and you wouldn't want them to be the person writing the check. 3. They have good reasons for their concern which you had not yet considered. All of these sound like good outcomes to me.
- ablekh 7y agoThank you for sharing your thoughts. What you're saying definitely makes sense. However, the question is whether one should prefer or avoid such, considering my assumptions on relevant pros and cons (in other words, it's a question about fundraising process optimization).
- staticautomatic 7y agoOk, but optimizing for what?
- ablekh 7y agoFor fundraising time and effort.
- staticautomatic 7y agoI will venture a guess that you'd do better pitching people with domain experience, particularly if their fund targets your domain. I have never pitched a hard science startup but I believe it's generally true that people prefer to invest in things they know and understand. It has certainly been true of my fundraising efforts in niche markets.
- ablekh 7y agoI very much appreciate your advice as well as being first to provide feedback. Pretty much the same rationale was my original thought as well, but I want to hear a variety of opinions. Let's see what other people might think and/or argue about this aspect.
- deleted 7y ago[deleted]
- im_down_w_otp 7y agoYou want to pitch to VCs who you can get to believe you're solving a real problem that exists (or will obviously exist) in the market, the solution to that problem that you're providing scales super-linearly when money is added to the pot (i.e. is a product, not a service), and that the actual market opportunity is huge in total Dollars. It helps then if they're familiar-ish with the markets you're addressing so they'll be aware of some of the challenges and sizing considerations (we talked to many, many VCs who just had no idea how big markets were outside the ones they were familiar with, like the enormity of the "Operational Technology" market compared to the IT market), and also that you can clearly articulate what you're making is an actual repeatable product to sell. The most important thing to remember is that VCs want to make money, your ideas are just a path to making money, so your #1 job is to show them how they're going to make lots of money, not show them how clever your ideas are.
- ablekh 7y agoI appreciate you sharing your opinion. So, essentially, you don't seem to think that potential cons of approaching VCs with domain knowledge that I mentioned above (inherent "bias" and lack of belief in possibility of certain solutions) outweigh relevant potential pros. Regarding other aspects, I certainly realize VCs' market size and financial upside considerations.
- im_down_w_otp 7y agoIt could present issues if you're speaking to a particularly disagreeable VC, but you're unlikely to convince that person anyway. They've decided they've got an axe to grind and they're going to use you as the grindstone. If you're in a situation where you're having to overcome objections in your pitch, most of the time you've already lost, and you should just move on. The goal for your pitch is to figure out how to sidestep or head off at the pass any of the objections you've heard before.
- ablekh 7y agoUnderstood, thank you. I agree with your points. However, just to clarify, the basis for my original question is whether it is possible to predict VCs' "(dis)agreeableness", based on their domain expertise or lack thereof. I appreciate your opinion and look forward to hearing more thoughts from this community.