What to Know About Venture Capital Deals

What’s up everyone! Today we’re discussing what you should know about venture capital deals.

The financials of venture capital funds are very skewed because there are so many assumptions involved; there’s no proof of concept.

Here’s some things to consider when deciding to invest in a VC deal or not…

#1 Product/Tech

What’s the value of this product? What are they bringing to the table?

Although it may be hard to pin down a straight-up answer, you should know what you are investing in beforehand.

#2 Management

Beware of early-stage companies; the entrepreneur-spirited owners are more likely to pivot and throw curve balls.

Examine the owner and the team they’ve hired. What’s their track record?

#3 Product Market Fit

If you see that the product fits a niche in the market, then invest!

Research the market. For example, if the product is satellite TV, but more people are streaming using online platforms, then that is not an optimal market fit.

#4 Financials

Because the product will be in its early stages, the financials will be difficult to interpret.

So, verify that their business model is sustainable. Will they be gross profit? When will they hire?

#5 Risks

Consider the risks involved. Could a competitor take over the market space?

I asked Lincoln in my video…

“How do you stay informed enough to invest in young companies before everyone else?”

Lincoln said there are all sorts of databases and newsletters to keep up on.

This will help you understand which companies in which industry received funding from which VC.

Another great resource is the Black Card database at Fund Launch!

Last piece of advice: If you have the capital and want to invest in VC deals, then make it known!

If you’re good enough at that, then the deals will come to you!

Conclusion

So, there are some things to know about venture capital deals.

If you have any additional questions, go to Fund Lauch!

That’s it for today!

Thanks,

Bridger Pennington

Want to get direct guidance for your fund? Schedule a time with my Fund Advisors!

DISCLAIMER: This content is for educational and informational purposes only. It is not to be taken as tax, financial, or legal advice. You should always consult a legal professional before taking action. Furthermore, this is not a recommendation to buy or sell any security. The content is solely just the opinion of the authors.


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