Two weeks ago, Northzone visited Fast Track Malmo headquarters. Northzone is a European VC with over 20 years’ experience in backing early-stage tech companies.They have invested in over 120 companies, including Spotify, iZettle, Trustpilot and Fishbrain. Henrik Grim, an investor at Northzone, held a workshop in venture capitalist thinking. Here’s what we learned from his visit.
Venture capital is high risk, with the hopes of high return. This means that what venture capitalists are looking for are the top 1% which can attain such returns. But who is this 1%? How can this 1% be measured? According to Henrik Grim, it is all about the team.
Exceptional teams not only have big dreams but also get things done. These two attributes naturally occur when teams have passion for what they are doing. It is this passion that gets VCs excited. As Henrik describes it, “Shit always hits the fan but the differentiating factor is the team that has the passion and the drive to push through it”. This energy is what makes VCs take notice and get you your investment. If your team has sincere passion for the enterprise, you are already on the right track.
Apart from the team, there are other practices that can aid in your journey to getting VC funding; especially when concerning how you explain and frame your enterprise to VCs.
Framing Your Enterprise
To stand out from the hundreds of other companies looking for VC funding, you need to keep it simple. The most important questions you need to help VCs understand is what you do and why it is special. If you can communicate these two points in a concise manner, you will be remembered; and being remembered is the first step to a fruitful relationship. From there, being prepared and knowing your data inside out is of utmost importance. If you don’t know the answer, no one will.
Getting VC funding is no walk in the park. It is a matter of making connections, maintaining good relations and being an exceptional communicator of what you do and why. With a good team behind you, you’ve already won half the battle.