Point Number 6 on How To Pursue Venture Capital


Watch what you say.

Last time, we focused on having a plan. As a corollary to presenting that plan in your conversations while seeking venture capital, here are some things you should never ever say (or at least do your best to avoid saying) to a venture capitalist:

This is really several tips in one post. It’s a nonexclusive list of statements and phrases that will not help you, and may even hurt you in your quest for investors.

1. “If we can capture just one percent of the market, we will…” This phrase is bad in two respects. First, it is naïve, because it implies that in a large market, almost anyone can grab a small percentage. This may be true in economics textbooks, where they describe “perfect competition” but it’s definitely not true in the real world. The other problem with the phrase is that it may give the listener the impression that you’re not thinking big enough. Venture investors don’t want to invest in bit players and also-rans, they want winners. By definition, you cannot achieve extraordinary returns on investment with ordinary performance.

2. “We have no competition.” In other words, there is no market for your product? If you don’t have obvious competition, then your product is competing against pre-existing solutions to the same problem that your product purports to solve. Plus, without acknowledging competition, you are really asking investors to make a double bet: the first that is that a market for your product will emerge, and the second bet is that you have the winning solution.. Venture investors are not in the habit of compounding their risks.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Sands Anderson PC | Attorney Advertising

Written by:


Sands Anderson PC on:

Popular Topics
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.