Unfortunately, you can't always explain why a
venture capitalist chooses to invest in one startup and not in another.
Despite what some will claim, there is no magic formula that
entrepreneurs can follow to assure them funding 100% of the time; these
are just guidelines to follow to increase your chances, but in the end, a
VC's decision is not always about the quality of the company, idea or
founders. It's like in a relationship when one party breaks it off by
saying, "It's not you, it's me," only for VCs they actually mean it most
of the time.
DFJ Gotham Ventures investor Mark Davis, who blogs over at Venture Made Transparent wrote Tuesday about how sometimes, even when looking at a great company with a promising future, VCs (himself included) still say no. The reason? Well, for VCs, investing in a startup is a lot more than just determining whether it will have a prosperous future.
Ultimately, VCs are looking for a financial return on their investment, and while potentially successful startups can mean quick bucks for entrepreneurs, the VC may not stand to benefit as much from investing as they would like. It sounds mean and nasty, but VCs don't exist to simply shell out cash to worthy companies; they have been tasked with taking a venture fund and investing in companies that will provide high returns.
To read the full, original article click on this link: Investors to Startups: It's Not You, It's Me - ReadWriteStart
Author: Chris Cameron
