What Do VCs Really Look For?

Many articles have been written about the criteria venture capitalists use in selecting companies in which to invest. This article from Entrepreneur.com is one of them that stresses the latest information received from a recent gathering and is well worth reading in its entirety. A couple of nuggets follow:

"Business Model. Will the numbers map out? In other words, once someone takes a sharp pencil and starts tracing where every revenue dollar comes from and then seriously challenges every expense it'll take to generate that revenue dollar, will you have:

-a profitable model?
-a repeatable model?
-an expandable model?
-a predictable model?
-a defensible model?"


"The team is still an important part of the equation, but the entrepreneur is just as important. Here's what the investors are looking for in both:

-Passion: The entrepreneur must demonstrate a contagious excitement about their vision for the company.
-Tenacity: The entrepreneur must prove they have the stamina and willpower to stay with their vision through thick and thin.
-Flexibility: The entrepreneur must be willing to reevaluate and refocus their plans when things don't work out as anticipated.
-Commitment: The entrepreneur must be willing to invest enough of their own money into this project to convince investors they're serious.
-Teamwork: The entrepreneur's team must prove they can work effectively together.
-Coachability: The entrepreneur and their team must be coachable. No team knows everything they need to know to succeed.
-Knowledge: Investors prefer to back teams that really know their market by having backgrounds that are rich and impressive in the market niche for which the company is engaged."