Morning Startup invited Shahirah Gardner, Founder of Finch and Board Member of Skalata Ventures to provide insights about raising capital.

Here are our top five takeaways:

1. VCs are looking for the grand slam. They always evaluate a startup's potential to get x return on investment. Startups need to show at least 10x.

2. In a pitch, VCs assess:

   • Founder risk: is the founding team coachable and open to advise.

   • Market risk: how attractive is the market size.

   • Product risk: defensibility.

   • Competition risk: what competitor exists and what is the startup's unique value proposition.

   • Technology risk: innovation.

   • Timing risk: is it too early or too late.

   • Marketing risk: how does the startup acquire customers, and for what costs.

   • Financing risk: what capital is needed, and when do VCs get their 10x return on investment.

3. A slow maybe, it's a no. Things that VCs say, but actually mean 'no', are for example: "We'd love to get in on this as soon as you find a lead investor!" or "Sounds interesting, can we meet in four weeks?".

4. Don't stop pitching to VCs until the money is in your bank account.

5. Do your due diligence on VCs. It is important to find the right investor-startup fit. Helpful questions to ask VCs are:

   • What else can you bring to the table?

   • How have you helped your portfolio companies?

   • Who can you connect us to?

   • Why should we accept your funds?

The Skalata Venture Team offers free office hours, where experts provide advice, help to point out blind spots and offer a fresh perspective.

👉 Book a  free 30min online session with one of their experts.

Source: Shahirah Gardner, July 2022.
Picture: Morning Startup