How to convince us

We often receive the question what is needed to receive venture funding and to convince investors. To manage expectations, venture capital is only suited for a few companies.

These companies typically have:

  • complementing and extremely dedicated founding and/or management team
  • service or product that is ready to use or sell (and has been used or sold before)
  • big problem, usually implying a large (or new) market
  • sustainable (even unfair) competitive advantages
  • great, exciting and highly scalable product or service
  • usually funded by own money, money from family and friends, business angels or seed funds
  • clear use for the money and/or the access or network we and our partner bring along

capital300 will focus on companies that have

  • some touch point and/or history with us or our partners (e.g. startup300), so that we both know whom we will partner with the next couple and very intense years
  • an information technology focus (most times this will mean software, but we will also consider hardware/med-tech businesses)

Our process is lean, fast and transparent

  1. Introduction & first information and meeting
  2. Building a shared history, usually by being in touch with us either directly or via our partners, usually 6-12 months prior considering funding (we learn to know you and you learn to know us)
  3. Introduction to selected fund partners
  4. Initial due diligence with fund partner (especially on market & competition)
  5. Issuing of a term sheet (with our fund partner)
  6. Detailed due diligence (legal, tech)
  7. Investment

In case everything goes right (but unfortunately we have to say “no” a lot), we will typically invest $ 1-10m together with our fund partner

In case we are really convinced, we may also invest smaller tickets in earlier phases in order to enable you to faster complete your product or team, or to faster grow your business so that you are getting ready for a larger round of financing. To keep it easy for you, in this phase we will usually invest via convertible loans, which is fast and cheap (no notarial deed).

Information Package

So what information should you provide when you first approach us. Our friends at Sequoia have published a great article, summing it up, which we adapted slightly:

  1. Company purpose (Vision/Mission)
  2. Problem (customer pain, how it is addressed now)
  3. Solution (value proposition, demo/video/screenshots)
  4. Product (features, tech, IP, development road-map)
  5. Team (who are you, background, talents, experiences)
  6. Timing (why now, evolution of category, trends)
  7. Market (how many users/customers for your service, does it grow)
  8. Competition (better disclose them all than let us find some later, outline how you differ)
  9. Business model (pricing, account size or lifetime value, sales and distribution model, pipeline)
  10. Financials + Key Metrics (keep it simple and focused on the most important KPIs)
  11. Use of Funds (how would you spend the money (e.g. headcount) to achieve specific milestones)
  12. Cap Table (who has invested, how much, any loans and/or options issued)