Here are some notes from a seasoned entrepreneur who attended this SDForum VC Roundatble event last night in Palo Alto featuring the following panel: Rebecca Lynn (Morganthaler Ventures), Evan Liang (Shasta Ventures) and Rohit Gupta (Opus Capital).
Comments re. what VC’s are seeking in a software/services startup:
- subscription models are favored; free first, subscription later is problematic
- most startups need a rockstar CTO (engineer) to get traction
- 1st VC meeting: fewer people is better (no entourages); leave the white-haired advisors at home
- common process for startups that get funded: prove your product, get customer response, need money to scale to acquisition
- startups seeking seed funding need to have already done surveys, testing and research to prove their business viability
- FOR SERIES A FUNDING: – SaaS: more a bet on the team (product in market, ~$1M in revenue); $10M ceiling is common, often VCs are waiting until that ceiling is hit before jumping on board
- Consumer Internet: need more on product development and having more traction (site launched with a real non-Ad based rev model)
- in either case, the company has to have potential to be a billion dollar company to be fundable
There ya hav’t.