‘The’ VC Funding Framework
7 Questions every VC must find an answer to, before investing
Roopan Roy John
Has the venture followed “Think problems first, then solutions” approach?
What needs does the venture fulfill?
Who are the customers?
1.What is the Value Proposition?
What is the ventures market segment?
What is the size of the market?
What is the possible scalability of the venture?
What is the scope of market penetration?
2.What is the Market Size?
Does similar products/services exist elsewhere?
How does the proposed/existing venture fare against similar players?
Is there scope of a sustainable competitive advantage?
Does Demand exist or does it need to be driven?
What are the dependencies?
What are the key risks?
What is the revenue model?
3.What is the Competitive Landscape?
4.What is the Business model?
Are/Was there any entry barriers?
What is/was the entry strategy?
Does/Did alliances or partnerships it make sense?
What are/were the resources required?
What is/were the schedules and milestones?
5.What is the Market strategies and roll out plans?
Does the team have the knowledge, skillset and passion?
Do they possess the ability to build the organization and run the business professionally?
Do they have depth of knowledge and understanding about the customer and the market?
6.What is the Quality of the Leadership team?
What is the project cost?
What are the phases of growth?
Which metrics capture profitability effectively?
How can the venture be monitored seamlessly?
7. How is Financial Sustainability and Monitoring ensured?
Following this 7-point checklist will help Sohan decide his next investment destination, to create value for himself and the stakeholders.