Finding the right venture capital partner can be challenging for any startup founder. Securing funding means connecting with investors who not only have the resources but also share your vision and values. Researching and identifying the right VC firm is critical for ensuring long-term success and alignment.
Here’s some of the best advice from Reddit on how founders can find the right VC for their startup.
Post: How do you identify the right VC to reach out to?
[deleted], 3y ago:
One of the characteristics of a good entrepreneur is domain expertise, meaning that they know the industry/space/category, including but not limited to their competition: the large players, the established companies, the rule-makers, the rule-breakers, the up-and-coming companies, the startups, who is financing what, the dealmakers, and who is investing in what.
Like you said, VCs invest in sectors/stages/geography. Knowing who is present in your sector and market and is suitable for your stage is part of the domain expertise.
There are also directories of deals.
Lastly, you might want to look first at angels/angel consortiums before VCs. Alas, the same rules apply.
spookiermulder, 3y ago
It’s tough to say which investor is good or bad. Twitter is a good place to get an idea about how some investors think and how they are.
As to your questions:
Make sure that their portfolio doesn’t consist of mostly bigger companies (e.g., Lyft, Airbnb, etc.). The more smaller companies they have in their portfolio, the more chances they will hustle for you and be useful.
Post: How do you find the right VC’s to reach out to?
Ostandfounders, 1y ago: I would go to Crunchbase and look at similar startups and see who invested in them at the pre-seed/seed round.
- OP, 1y ago: Competitor research makes a lot of sense.
Sandboxsuperhero, 1y ago: PitchBook is as good as it gets for a cold outreach list. In-person networking is likely a higher hit rate, particularly if there are good metrics. Warm intros are the best.
FWIW – all of our useful VC conversations were from warm intros/networking. We didn’t have high-quality conversations from cold outreach.
sjricuw, 1y ago: Ramp has a huge database (here – have to give email tho). There’re a few others.
Post: How do you pick the right VC firm?
InstantAmmo, 1y ago:
Try to find the founders they have funded where things were not working out.
Also, make sure the person you are working with is planning to stay at said firm. If not, make sure other partners have buy-in on the deal and want it. Nothing like the person who did your deal leaving and you no longer have a champion at the firm.
drgoodvibe, 1y ago:
VCs are able to: know the domain you’re in, help you network within the domain or industry, lead future funding rounds, be founder-first oriented, support you in hiring additional team members, and help you find your first customers potentially.
VCs that just hand over money and then expect to be on your board to exert control but don’t offer any support to help you launch your business at a pre-seed or seed level are totally useless.
iRandoBot, 1y ago:
From all the research I’ve gathered, bigger checks don’t always mean better. I would read the terms and agreements and make sure it’s not going to bite you in the long run.
Some agreements will make sure they get their money back and more before you get anything.
There’re also the rules on how you’ll operate under their supervision, etc.
If I were in your shoes, I’d choose the one that is going to support you and put you and your team first (probably not a likely chance).
Take this with a grain of salt. It’s only from what I’ve researched online and other similar posts.
There are also other alternatives like accelerators and Y Combinator.
Edited for clarity.
About the Author: Tess Danielson is a journalist and writer focusing on the intersection of technology and society.
Tell us about what you’re building.
If you’re seeking pre-seed or seed investment and think Beta Boom is a fit, reach out.