Behind the scenes #12 | VC is not for everybody

14.05.2021

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HELLO

הי

Today we wish to shed some light on the matter of choice and certain expectations. As you probably know, there are many paths you can choose in order to secure funding for your startup. But should this path always lead to VC funds?
Try to see it this way: if you suffer from a fear of heights, you do not go trying to summit K2, and if you are exceptionally tall you do not sign up for flight school in order to become a pilot. In all cases, what matters is your personal predispositions and the criteria set by the opposite side. Let us therefore see how it works with VCs.
TDJ Pitango Ventures team

VC is not for everybody

A powerful correlation between startups and VC funds exists in our ecosystem – if you are setting up a tech company, you absolutely must prepare a pitch deck in order to charm investors and secure finance, which is all fine and well: just like many other funds, we are pleased to be chosen and approached by you… and yet there is a certain caveat… a certain “BUT” to this.
Working with VCs is not for everyone – why not? Because of the tempo, dynamic growth and certain expectations involved – such as the exit. If you do not plan to sell your company within 5 to 10 years, perhaps you have chosen the wrong source of funding. You should also consider things if you do not need substantial sums to get going (as is typical in biotechnological firms) or if quick, global scaling is essential in order to create and maintain a competitive advantage. There are also times when technological companies fail to quickly achieve international reach, a new generation of tech solutions might appear meaning that company no longer has a reason to exist.
There are a great many fascinating firms which generate substantial incomes without needing to cooperate with VC funds – we see this most often in startups offering consumer and services solutions. This also relates to local problems and solutions which are tricky to transfer to other territories.
TDJ Pitango seeks to discover unique ideas and visions with the potential for global scaling – those which solve important problems or satisfy important user needs regardless of their geographical location. The technology involved should represent a real challenge to the competition, creating a certain new quality. Such facts about investor needs should be taken into consideration before you decide to partner with them – consider whether your company, your vision and needs have the right qualities for this sort of partnership.

VC money comes with benefits (some funds provide more of it than others) and also with strings attached. Make sure you understand well the latter part and it is in line with your approach to the company you are building. <span class="su-quote-cite"><strong>Wojciech Fedorowicz</strong></span>
You are lucky with a choice for investors, you’ve check them out, the financials are right and the timing is right and your startup. Now it’s time to trust your instincts and pick the one that will be there for you in the long run.<span class="su-quote-cite"><strong>Daniel Star</strong></span>
                                                                                           

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