Wednesday, July 05, 2006

Ready to meet your first VC?

Look at your presentation once again and check if you are going to cover the following topic. Remember, a venture has four risks and you need to address each of them in your presentation. A VC is listening to you speak about your idea and is thinking about these four risks. He wants to know how much have you thought about these risks and how you have reduced these risks for him. This does not mean you mention these risks in your presentation, but you cover each of them in your talk. Have a clear strategy on how to address them in your presentation without actually referring to them.

Market Risk

Will customer buy this? Does he need it? Will he pay this much? Will he go for an alternative? Is there a good size of market for this? Will he need it by the time this product is done? Is there a competition to the product? Is there competition to the technology? How will you overcome this competition and make a place for yourself?

Technology Risk

Will this be achieved? Is this being tried out for the first time? Are there big obstacles in technology by which this cannot be achieved? Will it turn out to be exorbitantly costly to achieve this?

Execution Risk

Is the team capable of delivering what they are promising? Do they have enough man power with right skill set to execute this? Will they run into problems like losing team members? Do they have a good product development plan where they know how to get the desired components and fit them together? Will they do it in time or will they overrun? Do they have senior people guiding them? Can they deliver?

Financial Risk

They don’t expect you to solve this- but you need to tell them what funds you need at what time.

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