Entrepreneurial Finance and Venture Capital

6.

The Venture Capital Investment Process

6.1.

Deal Sourcing and Origination

6.1.1.

Proprietary Deal Flow

6.1.1.1.

Sourcing from Networks

6.1.1.2.

Referrals from Portfolio Companies

6.1.2.

Network-Based Sourcing

6.1.2.1.

Industry Events and Conferences

6.1.2.2.

University and Accelerator Partnerships

6.1.3.

Inbound vs. Outbound Sourcing

6.1.3.1.

6.1.3.2.

Inbound Applications

6.2.

Screening and Initial Evaluation

6.2.1.

The Elevator Pitch

6.2.1.1.

Key Elements of a Pitch

6.2.1.2.

Assessing Founder Communication

6.2.2.

6.2.2.1.

Essential Slides

6.2.2.2.

Storytelling Techniques

6.2.3.

Initial Partner Meeting

6.2.3.1.

Evaluation Criteria

6.2.3.2.

Go/No-Go Decisions

6.3.

6.3.1.

Management Team and Founder Assessment

6.3.1.1.

Background Checks

6.3.1.2.

6.3.2.

Market Size and Opportunity

6.3.2.1.

Total Addressable Market

6.3.2.2.

Serviceable Available Market

6.3.2.3.

Serviceable Obtainable Market

6.3.3.

Product and Technology Review

6.3.3.1.

Product Roadmap

6.3.3.2.

Technology Differentiation

6.3.4.

Competitive Landscape Analysis

6.3.4.1.

Identifying Competitors

6.3.4.2.

Barriers to Entry

6.3.5.

Financial and Metrics Diligence

6.3.5.1.

Historical Financials

6.3.5.2.

6.3.6.

Legal and IP Diligence

6.3.6.1.

Intellectual Property Ownership

6.3.6.2.

Regulatory Compliance

6.3.7.

Customer and Reference Checks

6.3.7.1.

Customer Interviews

6.3.7.2.

Reference Validation

6.4.

Investment Committee and Decision Making

6.4.1.

The Investment Memo

6.4.1.1.

Structure and Content

6.4.1.2.

Risk Assessment

6.4.2.

Partner Presentations and Debate

6.4.2.1.

Internal Discussion Process

6.4.3.

6.4.3.1.

Voting Procedures

6.4.3.2.

Documenting Decisions

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7. Structuring the Venture Deal