VC’s Pain points - How to solve a VC problem with your startup
VC’s Pain points - How to solve a VC problem with your startup
by José Maia, Director of August One Capital SCR and Partner at GMT Hospitality
Bottom line: nobody actually cares about your startup!
Maybe your parents worry and your boyfriend and friends can be interested for 10 minutes, but, in reality, if you leave it today, no one will cry with longing. Unless, unless… it solves a problem for someone. Unless it gives visibility to those who want to be seen, eases the conscience of those who feel they need it, extends mobility to those who are blocked by borders, offers power or influence to those who want to exercise it or, more usually, creates wealth for those who seek it.
If what your start-up needs is external financing, and this condition is something that the SBI Consulting can help confirm or deny, the venture capital companies aka Venture Capital Firms aka VC’s can be one of the options. Therefore, going back to rationale, if you want to attract investment from a VC in your project, you have to resolve a problem. To do this, it is a good idea to understand how a VC works and the different problems that each key person of VC deals with daily.
Now, a VC invests with its money or with the money of others. As it has to be especially cautious and transparent when managing other people's money, VCs makes the same agreement with each investor it attracts, obliging itself to use their money in a certain way and for a certain time. This pile of money that they raise is an investment instrument and is called (venture capital) fund. The set of rules that the venture capital company will have to follow to use this money will be called the venture capital fund management regulations.
Active instruments – yes, VCs also have to do their pitch to investors. For this there is a “prospect” which summarizes the investment policy and other mandatory information. Indicates target profitability, deadlines, sectors, markets, tax or personal benefits, etc. It is the technical sheet of the microwave you buy.
Management Regulation – this, in addition to detailing information summarized in the prospectus, adds its operating manual and warranty to the microwave’s technical sheet.
And where do we want to go with the story of microwave? Now, for the venture capital company to sell the microwave with the technical data sheet that accompanies it, it has to buy a microwave that corresponds to that technical data sheet. This is how those who make microwaves, or rather, those who make start-ups, founders, can solve a problem for VCs in exchange for the investment and support they need. To achieve this, the first step is to get to know the venture capital companies that are on the market and obtain details about the investment instruments that they have, or will have in the short term, assets. In Portugal, I recommend consulting the information dissemination system of the CMVM and management companies (including venture capital companies). As you can imagine, the complexity and diversity of entities and investment instruments hardly fit into one newsletter and in the spectrum of attention and interest of our audience. But I am pleased if some of the concepts to be bold have been instructive, and I'm amused if the other concepts in bold have earned the wtf?! you want clickbait.