The document outlines 5 common mistakes that startups make when applying for venture capital (VC) funding. They are: 1) Having no "wow factor" or unique selling proposition for the business. 2) Expecting a quick turnaround for funding decisions, which often take months. 3) Touting an untested business idea that is only in the planning stages. 4) Neglecting to include real market data and financial projections backed by research. 5) Lacking a clear development plan for how funding will be used and what milestones it will help the business achieve. The document provides tips to avoid each mistake and improve chances of securing VC funding.

1. Common mistakes
startups make
when applying
for funding. @Abhishekshah

2. There is a perception
among entrepreneurs
that a revolutionary
idea is enough to secure
the venture capital
needed to kick-start
their businesses.

3. This is
simply
not true

4. Here are five of the
most common mistakes
made by entrepreneurs
when applying for VC
funding.

5. 1. No WOW! Factor

6. The first rule in the VC
game is that your
business proposition
must have an
exceptional
differentiating factor .

7. You need to know what
your sustainable
competitive advantage
will be.

8. If you’re trying to raise
funding for a
conventional business or
idea like a franchise or
service business . . .

9. VC is probably not the right place to start looking.

10. For the best chance of success
for
1. No WOW! Factor

11. 1
Be sure your business has that x-factor

12. 2
Do your Research
a
understand what
industries or types of
businesses VCs are willing
to fund

13. 2
Do your Research
b
Call them first to
clarify before
applying and
wasting both your
time and theirs.

14. 2. Expecting a 24-hour turnaround

15. A large number of
applicants turn to VC
funding at the eleventh
hour as a last-ditch
effort before running
out of capital.

16. Securing VC funding is
not for the impatient:
Business analysis, building
the investment case,
approval, due diligence,
and legal and financial
structuring are
undertaken with
meticulous care and
attention to detail.

17. Plan for a longer process
than you imagined as it
could take a number of
months depending on
the deal size and stage
of the business.

18. For the best chance of success
for
2. Expecting a 24-hour turnaround

19. 1
Don’t leave it to the last minute -- VC
funding is more difficult to secure if it’s
seen as a last-gasp effort.

20. 2
Plan for the long run -- get to know
the VC funds and managers. The vast
majority of deals are done through
referrals and existing relationships.

21. 3. Touting an untested idea

22. VC analysts and fund
managers are unlikely to
be swayed on the
strength of a business
plan alone.

23. For the best chance of
success, develop a
working prototype or
some basic software.

24. VC funds respect
entrepreneurs who have
risked their own funds
and resources to get
their big idea off the
ground.

25. For the best chance of success
for
3. Touting an untested idea

26. 1
Before hitting the VC trail, build that
prototype or get your software to a
test group.

27. 2
Develop a solid business plan that
clearly spells out the potential for your
unique solution to a specific market’s
burning need.

28. 3
Avoid jargon in your business plan,
make doubly sure it’s free of errors,
and tailor it to the fund’s specific
mandate.

29. 4. Neglecting the real numbers

30. A solid business plan is
not based on
assumptions.

31. VC funds want to see
market research
reflecting real data to
back the financial
projections.

32. They want to fund
entrepreneurs with an in-
depth understanding of
the market . . .

33. both locally and internationally.

34. For the best chance of success
for
4. Neglecting the real numbers

35. 1
Do your own research -- this gives you
better direct insight. There is plethora
,
of online tools that enable you to
gather data quickly and affordably.

36. 2
Be sure to do a detailed competitor
analysis, where you compare your
solution to others on a feature-by-
feature basis. Also consider future
territories and include relevant data
and sources.

37. 5. Lacking a clear development path

38. T few entrepreneurs
oo
have a clear
understanding of how
much funding they
actually require for the
next stage of their
business.

39. And sometimes are even
unclear about what the
critical goal is that the
funding is to help
achieve.

40. You lose credibility if you
return to the market for
more funding without
having made significant
progress.

41. For the best chance of success
for
5. Lacking a clear development path

42. 1
Be clear about why the funding is
needed and what it will help you
achieve.

43. 2
You need to determine how much
actually need and not how much you
think you should raise based on ‘norms’
— the more you raise in the early stage
of your business, the more equity you
will have to give up.

44. 3
At the same time, make sure you raise
enough to get you to the next phase,
and work on the funding carrying you
for 18-24 months.

45. Now avoid these Common mistakes

46. Appitive.com