Leta blog: Is Your Startup Venture Investable?
17 February 2020At LETA Capital we are approached by hundreds of startups yearly, and we shall admit, that some portion of inbound applications come from businesses which are not suitable for venture capital investments at all — the likes of mom-and-pop shops, traditional brick-and-mortar SMBs, service businesses, etc. Having analyzed our deal flow pipeline from 2019, we realized that we were getting great deals via referrals from our professional network, as well as outbound, while the quality of inbound applications varied significantly (from totally irrelevant to fascinating ones, incl. the ones which we ended up investing into). We haven’t done any thorough surveys, but it feels like some part of business owners approaching us in search of financing are not particularly aware of exact criteria for businesses in order to be considered for financing by venture capital funds. That is why we decided to create this blog post and dedicate it to explaining to business owners what it truly means to be venture investable and in which cases VC funding is an inappropriate choice. We hope you will use this post as a practical tool to benchmark your business to VC-industry best practices and as a result, will either understand that VC-funding path is not for you and will switch to alternatives or will reassure that you still want to pursue VC financing and use this article as a checklist for key requirements to meet VCs expectations. After that, when the timing is right, feel free to send us your polished and (maybe) revised application with the deck via the form on our website, and we will make sure to get back to you with the feedback.
Read more on our medium blog