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Venture Capitalists Seek Stability from their Start Ups
By Jenn Trap on 2009-03-31 15:35:18
The days of restaurant napkin business models have certainly been left behind, but it appears that the barriers for entry into an increasingly competitive start-up environment are well beyond the proof-of-concept expectations of the early 2000's.
The word around funding circles is that stability of growth are key assets to start-ups seeking venture capital. Among the many characteristics which venture capital expect out of new investments, the use of best practices rather than shoe-string solutions is of growing concern. While frugality is still an expectation, investors are looking for opportunities where entrepreneurs are not skimping on resources that will keep their start-ups afloat.
While in the web 1.0 and web 2.0 growth spurts, the ideal funding opportunities were nascent start ups. It was more important for investors to get in early than to wait and make sure their investments were well protected. However, with the advent of an unsteady economy, and real concerns about the scalability of web ventures, issues such as server and systems monitoring, exploit prevention, and bulletproof security are becoming high priority.
Investors want to know that their dollars are going to businesses that are making smart decisions about their company, their products, and their users. You wouldn't recruit an athlete who is constantly risking his/her health, and you wouldn't invest in a company that doesn't attempt to mitigate risk.
The lessons for the next generation of entrepreneurs are clear. Investors want security and stability alongside growth. Invest in security and they will invest in you.
The word around funding circles is that stability of growth are key assets to start-ups seeking venture capital. Among the many characteristics which venture capital expect out of new investments, the use of best practices rather than shoe-string solutions is of growing concern. While frugality is still an expectation, investors are looking for opportunities where entrepreneurs are not skimping on resources that will keep their start-ups afloat.
While in the web 1.0 and web 2.0 growth spurts, the ideal funding opportunities were nascent start ups. It was more important for investors to get in early than to wait and make sure their investments were well protected. However, with the advent of an unsteady economy, and real concerns about the scalability of web ventures, issues such as server and systems monitoring, exploit prevention, and bulletproof security are becoming high priority.
Investors want to know that their dollars are going to businesses that are making smart decisions about their company, their products, and their users. You wouldn't recruit an athlete who is constantly risking his/her health, and you wouldn't invest in a company that doesn't attempt to mitigate risk.
The lessons for the next generation of entrepreneurs are clear. Investors want security and stability alongside growth. Invest in security and they will invest in you.
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