Venture Capital Funding Readiness: Borrow Brilliance from “VC” Investors
Venture Capital Funding

Even if you have no interest in obtaining VC funding, “thinking like a VC” is an excellent way to focus on the health of your business and evaluate your plans.

Venture capital people and other investors are interested in the current state of your business, your innovative ideas, and your prospects.

VCs and other sophisticated investors explore:

  • investments and resources provided by business owners,
  • current [pre-funding] valuation of businesses,
  • performance capabilities of CEOs and other key people at businesses,
  • market demand for products and services provided by businesses,
  • marketing and sales achievements… go-to-market savvy,
  • businesses’ financial strength, and
  • owner exit desires.

While that list is not comprehensive or complete, it does illustrate that VC thinking and the thinking of successful business leaders have much in common. To succeed in their roles, both VCs and business owners must think broadly and deeply. Nearly all VCs think that way. Many business owners do not think that way.

There is a significant difference between VC thinking and business owner/CEO thinking. VC’s have a far more detailed and methodical approach to considering all the essential details that contribute to business success. Compared to business owners/CEOs, VCs have far more knowledge about business success and failure.

Successful business owners embrace what Guy Kawasaki called “reality checks”. [When business owners are not fully prepared for success, VCs deliver reality checks to business owners.] Successful business owners want to know the good news and the bad news so they can accurately consider risks and rewards. [VCs can very quickly deliver bad news.]

When business owners/CEOs take the time to think like a VC, they reduce that knowledge gap and the insights they gain increase their leadership knowledge, the value of their businesses, and their future-success prospects.

Borrowing Brilliance from VCs…

The time you spend knowing how VCs think will bring huge value to your business.

You have heard the sales advice, “Put yourself in your customers’ shoes.” The goal of that advice is to make sure you know what your customers want and how your customers think.

Venture Capitalists control lots of money and have excellent tools to analyze businesses. VCs know the tough questions and the specific correct answers that signal a business will have a good chance to achieve future success. VCs see numerous business plans and proposals. When you meet VCs, they will not be emotionally attached to your business.

Leaders of small to mid-size businesses know about and perform business planning, risk management, sales, marketing, manufacturing, finance, and other business functions. However, most of them do not have disciplined techniques for deep analysis of these functions, competitive environments, market demands, economic trends, etc.

When leaders of small to mid-size businesses borrow brilliance and adopt VC mindsets, they increase the value in their business. To borrow brilliance from VCs they must learn how to set aside emotion and work on their businesses with discipled, planned processes that bring reality checks.

If you would like to learn more about “thinking like a VC investor” or “borrowing brilliance from VCs”, please email me rick@spiritedleaders.ca.