When pitching to VCs for fundraising you need to go into the meeting with your eyes wide open. There are far too many myths surrounding VC fundraising which, if you believe you will not communicate in the most effective way. I will share with you 5 myths from my experience and what I found to be true.
Myth 1: VCs are looking for Unicorns.
Truth: VCs are focused on eliminating opportunities that won’t be successful rather than ones that will become unicorns. No one can reliably spot a unicorn. So, a VC’s strategy is more about reducing risk by eliminating startups that they don’t think will become big.
Myth 2: Your pitch deck is all you need to secure VC fundraising.
Truth: Your pitch deck is only one piece of a much bigger puzzle. To get from that first pitch to a signed shareholder agreement you need, a mobilised and capable team and a strong business case for investment.
Myth 3: Fundraising will only take 3-4 weeks.
Truth: Securing fundraising will take longer than you expect usually between 3-4 months from start to end at later stages. After all, you can’t expect someone to part with large sums of money on a quick coffee chat and a short presentation.
Myth 4: Getting investment will be easy if you just get the chance to pitch.
Truth: Getting a meeting with VCs may feel like the hard part and a win when you achieve it. But securing the fundraising is much harder, with the first pitch being the easy part.
Myth 5: After a great first pitch you should receive a term sheet.
Truth: Seeking fundraising will be a test of your patience. The initial pitch, no matter how well it goes, is just the first step in a much larger process.
Don’t be led astray by these 5 VC fundraising myths. Go into the process with your eyes wide open knowing exactly what to expect from the process.