Category: Hacks

VC firms receive more than 1,000 proposals for investments each year, and only a few of them will actually make it to an investment. We often talk about due diligence being the crucial part of the process, where deeper investigation into the startup occurs, and check every single detail to make sure it’s worth the investment. Of course, it takes time, sometimes months or even longer for a startup. Can part of this process be faster, simplified, or operationally automated? Let’s discuss that.

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#1

Each fund conducts due diligence differently, meaning there’s no unified standard or even close to it. There’s a lack of clarity in founders’ minds on what exactly will be examined by VCs and at what stage of the dialogue, especially when we’re discussing early-stage startups. On the other hand, VCs look at different things: metrics to consider, how to evaluate teams, criteria, and scoring models are a black box. There’s a shortage of widespread methodologies, or it’s all treated as a ‘trade secret’ in other areas of business where certain standardizations exist.

You can evaluate the quality of a car, a product on the shelf, or medicines, as there are clinical trials and regulatory bodies like the FDA that provide approvals. But how do you evaluate a startup, since there isn’t a clear and open approach, especially when it comes to early-stage companies.

#2

This leads to the second problem, which is that startups are not ready to engage with investors after their initial pitch deck got a green light, to the next step. Simply because nothing in the process is clear except for how to present your 3-minute pitch. At least this part is somewhat standardized. There are many examples of pitches that successful startups have made, and we can learn from. But we all know that a pitch is just the first step in a long and time-consuming fundraising effort.

So going behind the closed doors into investor meetings, a lot of founders find themselves in a situation where they don’t have answers for questions coming their way, their data rooms are far from being complete, each VC tends to have some internal forms and sometimes bias, and things get into complications, larger than founders have time and resources to deal with.

A typical VC will ask over 100 questions during interviews and have several additional information and reference requests before making a final decision.

And because each VC firm tends to have its own approach, founders end up spending way more time adjusting and preparing for due diligence than they should, causing them to prolong the fundraising process and divert their focus from running a business or building a product.

#3

The third point to note is bias. When there’s no standard and no clear, understandable methodologies for evaluating startups, VCs come up with different questions for different founders, depending on their education, experience, gender, background, and so on.

All of this is based on the unique experience and vision of General Partners. If we try to do this now, for example, in the HR market, companies that don’t approach the hiring process systematically or structurally will face significant challenges. Before technology helped solve these issues, hiring was messy, and every company would build its own process, set of criteria, and scoring systems for candidates. Now, instead of manually scrolling through thousands of resumes, HR managers use technology to filter and sort all candidates, allowing for a better match and less time wasted from both sides. We’re not claiming this process is perfect; it has room for improvement, but it feels like early-stage startup due diligence is still sort of a wild west.

Taking best practices and making things more transparent for founders would help create a more efficient and time-effective process for all.

Should some parts of the due diligence process be automated to simplify and expedite the process? This question we recently asked among our LinkedIn community. Check the answers yourself:)

Yes, due diligence should and actually can be partially automated through the use of AI technology and data analysis tools. While some aspects of due diligence, such as assessing the team and evaluating the future opportunity for massive impact, may require human judgment and interaction, other tasks like data scraping, market analysis, benchmarking, competitor landscape, financial forecasting, etc., can be streamlined and accelerated with automation. Additionally, machine learning algorithms can help identify patterns and trends within large datasets, assisting in risk assessment and decision-making.

It seems like VCs invest in innovations but don’t use those tools enough in their own daily practice.

We believe that automation and AI can speed up certain aspects of due diligence, creating much deeper, data-driven decisions, saving time and energy from founders and VC teams to focus on what’s important — the human aspect of things. So, we will be seeing the VC landscape changing and processes becoming more tech-intensive and structured than they are right

Let’s talk about inspiration, leadership, luck, and hard work. These are basic elements of every entrepreneur. And we know what we are talking about. We appreciate that our fund has two sides — venture and entrepreneurial, which help us build strong communication not only with our portfolio companies but also with other startups in the Silicon Valley innovation ecosystem.

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We decided to sit down with Zamir Shukho, Vibranium.VC Founder and GP, and talk about his professional background and entrepreneurial journey before establishing Vibranium.VC.

#1. Could you share more about your journey as a serial entrepreneur and how it has influenced your approach to venture capital and investments at Vibranium.VC?

Being an entrepreneur is a very challenging task. On one hand, you have the freedom to work for yourself, but on the other hand, you work all the time, and your work-life balance suffers because when it’s your business, you’re always in the state of being the CEO 24/7. So, I had to learn along the way how to balance things out and make sure I develop myself as a professional not only as a CEO or business owner. This balanced approach helped me to identify operational issues in early-stage startups. Having the experience of building companies myself, I can really relate to what founders are going through, especially when they’re looking for product-market fit.

Being this kind of friendly VC sets the stage for a successful collaboration with founders, especially when they have a choice in selecting an investor for their cap table.

#2. What inspired you to establish Vibranium.VC, and what specific areas or industries are you passionate about when it comes to investing in startups?

For many years, I’ve built accelerators, worked with early-stage companies and large enterprises and their potential customers. I’ve witnessed their journey of product development, piloting those products, and helping them scale within these big companies. I soon realized that I wanted to do more because I was engaged and surrounded by so many talented people. Building a venture fund was the next gradual step, providing additional resources and funding to support startups growth. While the short-term strategy involved creating accelerators for large customers and working with them, the long-term strategy was to invest in potential champions and thrive together with them.

#3. What are the key areas or industries that Vibranium.VC is currently focused on for investment, and how do you see this evolving in the future?

We invest in early-stage SaaS companies, focusing on four key verticals. Firstly, productivity software, whether it’s designed for enterprise-grade solutions or SMBs, anything that can help businesses become more efficient, reduce costs, and better engage with their customers through tools like sales and marketing. The second significant vertical is fintech, where there’s a growing need for more secure, efficient, and quick solutions in the financial sector. The growth potential there is remarkable. The third major area is media and entertainment, particularly in content creation. This is especially true with the advent of new generative AI technologies that are fundamentally changing the way things are created. We find these three areas to be particularly interesting, and our focus is on investing in software companies within these fields.

#4. What specific qualities and skills do you look for in candidates who are applying for roles at Vibranium.VC?

When it comes to the qualities and skills that we seek in describing our current team, I can say that, first of all, devotion is key. People and their desire to help and support startups are vital. This job is not just about finding the right companies and investing money into them; it’s a long-term journey that we will undertake together with our portfolio companies. We want to ensure that the values we share and the vision for the future are also embraced by the startups we work with. So, when it comes to the team, we are looking for individuals with knowledge and experience in working with early-stage companies. Simultaneously, we seek those with a desire to support these companies beyond just the investment stage and work with them on a long-term basis.

#5. With over 1,250 startups having participated in various programs under your leadership, what key lessons or insights have you gained about the startup ecosystem, and how have they shaped your investment strategy?

Working with numerous startups, I’ve observed a common misconception that the notion of 97% of startups failing is not entirely accurate. In our accelerators, we’ve successfully aided founders in pivoting and discovering better models than they initially envisioned. This has resulted in a 60–70% survival rate among these companies, with around 30% of them securing funding immediately after the accelerator.

We’ve come to realize that it’s entirely possible to alter this dynamic by guiding founders to employ proper methodologies such as customer development, Lean Startup principles, and other essential tools.

This proactive approach prevents the unnecessary depletion of resources and enables founders to identify the genuine needs in the market or the right pain points of the customer, facilitating the creation of a product that aligns with those needs.

Through structured programs with methodologies, we’ve witnessed a significant increase in the success rate of these companies. This involves helping founders better engage with their customer base and the market to discover the elusive product-market fit. This learning has substantially contributed to a more successful startup ecosystem.

Transitioning to our investment strategy, it has empowered us to develop a process within our fund. This process enables us to identify potential risks comprehensively, assessing whether founders possess the necessary skill sets and understand how to achieve product-market fit and effectively run their business, beyond merely building the product.

#6. Could you share any specific success stories or standout achievements of startups that Vibranium.VC has supported?

I think it might be a bit premature to make any “loud” statements since we only began investing in the summer of 2022. However, what I can already note is that two of our portfolio companies that received investment last year are now progressing towards their pre-series A and series A rounds.

Despite the economic downturn, most of our portfolio companies continue to grow and demonstrate positive results.

We believe that a some of them definitely will become champions in the future.

As we move forward, we’re starting to witness interesting deals entering the pipeline, and we will announce some investments in the nearest future. We like to talk about our achievements when they really happen, so I’d suggest giving it a bit more time (smiles).

#7. What do you believe sets Vibranium.VC apart from other venture capital firms, and what unique value do you and your team bring to the startups you support?

I believe what sets us apart is, first of all, that we are still entrepreneurs. I’ve had businesses before, so when we communicate with founders, we speak the same language. We understand their hardships and what they’re going through. Our job is not only to invest but also to help them become more investable. Throughout our due diligence process, we assist and consult with them. We explain things and provide honest feedback about what they need to fix, add, or change for investors or VCs to be interested in supporting them with their money.

When it comes to the first stage of the process and going forward, we have this approach where we are a friendly investor always by your side.

We won’t impose our opinion or push our agenda inside the company; instead, we’ll be there when founders need us. If they need our mentorship, advice, or access to our network, we’ll be available. Whenever we see an opportunity for one or a few of our portfolio companies, we’ll proactively send these opportunities their way. This could include other customers, participation in events, free perks, or pitch competitions. We also offer perks from our partners or introduce them to solid investors that we believe could benefit their current fundraising. We actively help by sending contacts and opportunities their way.

Vibranium.VC joined National Venture Capital Association (NVCA) in October 2023, this will give us an opportunity together with other VCs shape industry-influencing policies and regulations, fostering a more favorable environment for venture capital investment and entrepreneurship.

#8. How do you envision the future of Vibranium.VC in terms of growth and the impact it can make on the startup landscape, both locally and globally?

So, we definitely believe in the long term when it comes to venture strategy and our actions. We’ve been in this business for many years, and we want to keep growing as a fund and as a team. We aim to engage with more partners, build programs like SoftLanding program, and help more founders relocate their companies to the United States, specifically to Silicon Valley, to raise money and build global unicorns.

I think our main role here is to be the right cheerleader for startups; they are the main actors on the scene. We see ourselves as coaches, here to support and help them. By having more resources and growing our second fund soon, fundraising, and building stronger teams and networks, we believe we can provide the right support for our champions.

The goal is to find more common ground, all working for the benefit of the companies, which ultimately benefits customers, the general public, and people globally.

Another personal goal of mine is to bring closer together the positions of VCs and startups. I aim to create a better, smoother dialogue between these two groups, helping them engage better and building bridges between them.

Embarking on the journey of securing investment is a crucial step for startups. The right investor not only provides financial backing but serves as a strategic partner in the long run. We often emphasize the need for investors to carefully analyze startups before providing funding, conduct proper Know Your Customer (KYC) checks, and perform detailed due diligence. However, it is equally important for startups to analyze investors before making any commitments. We’ve decided to delve deep into this topic and highlight some red flags that every startup should pay attention to before entering into any agreements with investors.

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Carefully select investors

Investors play a critical role beyond just providing funds. They offer insights, guidance, contacts and support that can significantly impact a startup’s development trajectory.

Picking the right investors is like choosing your team members for a challenging adventure. There should be a certain level of trust.

You want partners who not only bring in funds but also share your vision, connect you with valuable contacts, and offer guidance from their own experiences. It’s about building a lasting relationship. This careful selection process ensures that your startup’s journey is not just financially backed but also enriched with support, wisdom, and genuine collaboration.

Red flags in potential investors

• Lack of industry knowledge. Investors should possess a solid understanding of the startup’s industry. Red flags may include a general lack of knowledge or disinterest in the specific field the startup operates in. Zamir Shukho, Founder and GP at Vibranium.VC highlights that
  when choosing an investor, it is essential to look at the team and ideally, the team should have some relevant experience, either from the industry or from the startup’s vertical. This is to ensure that the team understands not only how to invest but also how to support the portfolio company further.
• Unrealistic expectations. Investors with unrealistic expectations can pose a threat. Beware of those setting overly ambitious growth targets, aggressive timelines, or making demands inconsistent with industry norms.
• Lack of commitment. Investors must be committed to the success of the startup. Signs of concern include minimal involvement, failure to meet commitments, or inconsistent communication. Valentina Pidgaina, Head of pipeline and partnerships at Vibranium. VC puts an emphasis on communication, that should be transparent, honest, and pressure-free for both parties.
• Poor reputation. Startups also need to do a KYC check. The reputation of an investor speaks volumes. Be cautious if there’s a history of disputes, negative reviews from other entrepreneurs, or a lack of transparency. Also pay attention to media presence. According to Zamir, it is important to obtain reviews from other founders who have interacted with the fund, understanding how they engage, conduct negotiations, and whether they exert extreme pressure on founders, among other things.
• Focus on short-term gains. Remember, venture is a long-term relationship. Investors solely focused on short-term gains can hinder long-term growth. Watch out for constant pressure for quick returns or a fixation on immediate exit strategies.
• Don’t have stable funds. If a fund has committed funds, it is crucial to verify their financial status. There are cases where a fund exists on paper but lacks the necessary funds, leading to a waste of time in negotiations.

Let’s talk consequences of ignoring red flags

Choosing an investor without thorough checking may lead to financial strain and loss of control for startups, especially first-time founders . Ignoring red flags can result in misaligned values, reputation damage (this is what you don’t want to face, especially if you are raising), limited growth opportunities, legal issues, and difficulty attracting future investments.

Additionally, it may stifle innovation and hinder the company’s ability to navigate tough times effectively. Proper research and consideration are crucial to avoid these consequences and ensure a successful, sustainable partnership.

As many of you already know, we launched our second Softlanding program for startups willing to relocate to the US. We discuss tips and insights: from navigating your visa application process and absorbing cultural differences to extracting valuable contacts from networking events and becoming a part of the innovation ecosystem in the country.

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Wecontinue to keep a close eye on Softlanding’s first batch alumni and are always happy to share success stories. One of these stories is about Greg Uspensky, founder of ASAP, a startup which helps supercharge client LTV for consumer businesses, and his experience obtaining an O-1 visa after finishing our first Softlanding program.

O-1 visa 101

O-1 visa gives you the possibility to live and work in the US. In my case, it also allowed my wife to come to the US as well (the most important part!).

In order to get the visa, you’ll have to prove that you possess extraordinary talent in your field by meeting at least 3 of the 8 criteria

We never considered doing it ourselves. I guess that’s something only professionals should handle, as it’s a major milestone for your future life and work.

Where to start

We were deciding between the O-1 (talent) and E-2 (investor) visas. Two law firms that I reached out to didn’t express much enthusiasm about my O-1 case because they couldn’t find enough evidence to support even three criteria. We decided to pursue the E-2 visa, but soon discovered that the waiting time was unpredictable.

During the Vibranium Softlanding program, we had the opportunity to meet a guest speaker from the Legalpad team. Legalpad specializes in work visas for startups, and we wanted to hear their opinion on our case. To our surprise, they found our case to be substantial, meeting at least three criteria. After a more thorough review, that number increased to 5(!) criteria.

Preparation process

It didn’t seem obvious to me at first, but to prepare for the O-1 visa application, you should:

• Reflect on your work: think about what you did in the past and what you do now and how can it be used as one of 8 criteria. I gathered all the publications, contracts and other achievements for the past 10 years!
• Reimagine your work: consider how you can make what you do truly exceptional. For example, think of Mario, who isn’t just a plumber but a hero saving Princess Peach from Bowser — that’s extraordinary!
• Gather evidence: dive deep into the results of your activities. Collect every piece of evidence that can support your case. This includes articles about you, contracts you’ve signed, events you’ve participated in, investments you’ve received, and even the number of downloads for your app. Don’t forget salary statements and memberships in accelerators; every detail can work in your favor if presented correctly.

If you’re a company founder aiming for an O-1 visa, there are a few obstacles to consider, which no one told us about initially. It took some time to get on the right track:

• Physical office requirement: your company must have a physical office, not just a virtual one. We opted for a coworking space ($300/month).
• Legal right to do business: ensure your company has the legal right to operate in your state. This is a straightforward procedure that your lawyer can handle (3–5 days, $200).
• Reference letter: you’ll need a reference letter from someone in the US who knows you as a professional in your field. Your lawyer will draft the letter, and the person will sign it. Some law firms may suggest more than one letter, but it may depend on the firm. We prepared a strong single letter.
• Translation: if your evidence (such as articles or contracts) is in a language other than English, you’ll need to find a translation agency to translate it into English and authenticate the translation. You can either choose an expensive agency for this task or translate the documents yourself and then hire someone with a translator diploma to sign them.
• Board authority: most importantly, your company’s board must have the authority to terminate your employment (yes, really). To address this, we expanded the number of board directors to three, including myself, and updated the incorporation documents to empower the other two board members with the right to dismiss the CEO.

Key steps

The process for us was as follows:

• Prepare the proof that fits the criteria.
• Modify the incorporation documents so that the company will have the right to terminate you as a CEO.
• Obtain approval to conduct business in the state.
• Find a person for the reference letter.
• Translate the proof if it’s not in English.

We signed the agreement with the lawyers in February 2023 and received our case approval in August 2023. It took us a total of 6 months.

Let me conclude by saying that the O-1 visa might seem challenging and unattainable, and there may be people who will misguide you or tell you that you’re not qualified.

Seek out lawyers who specialize in your specific case, ask for referrals, join visa forums, ask questions, gather evidence — by doing so, you will not only build your case but also discover evidence of the great accomplishments in your life that you might have forgotten.

P.S. Remember one more thing: this is your visa, and even if you’ve hired a professional lawyer or firm, you are ultimately responsible for this significant undertaking. Be very attentive and double-check everything.

It has been almost 3 months since we had the Demo Day of our first startups batch within the framework of Vibranium.VC Softlanding program. During expert sessions, we did talk a lot about networking and communication challenges founders face in a new country. In this article, we decided to highlight the top 5 communication challenges when relocating to the States. Spoiler — knowing the English language is #1.

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Challenge #1. Language.

Language is crucial — doesn’t matter where you plan to move. If you want to blend in with society — language is the tool that will help you to do that faster. Spelling of USA, it’s important to learn and practice English intensively, constantly improving both your vocabulary and pronunciation. The better your English language skills are, the higher your chances of success.

​​Non-US founders often need to learn English for several reasons, especially if they plan to operate in the international business world or wish to access the global market. Here are some key reasons why speaking English is essential:

• Networking and collaboration: In the business world, networking and collaboration are crucial for growth and success. English enables non-US founders to engage with other entrepreneurs, industry experts, and potential collaborators from different parts of the world.

Try to expand your network of English speaking innovation ecosystem players, do not only stick within your language speaking community.

• Participation in international events: conferences, trade shows, and business events often take place in English-speaking countries or involve participants who primarily communicate in English.
• Legal and regulatory matters: when dealing with international business transactions, contracts, and legal matters, English is often the language used in official documents. Understanding English ensures that non-US founders can comprehend and negotiate the terms effectively.

While English proficiency is essential, it’s worth noting that many successful non-US founders have achieved remarkable feats without being native English speakers. The ability to speak multiple languages and understand diverse cultures can also be advantageous in international business. However, English remains a crucial language for global business communication and opportunities.

Challenge #2. Cultural differences.

The first problem is a lack of understanding of the local business etiquette and mentality. It’s essential to invest time in learning the nuances of conducting business in the USA, understanding communication formats, business correspondence, and cultural norms. In general, the USA has a large number of immigrants.

Fully 55% of billion-dollar startups were founded by immigrants.

There’s no expectation that you’ll know and understand everything perfectly from day one. Americans are understanding and open-minded toward those who have moved here and are trying to build a new life. However, they won’t tolerate ignorance.

Challenge #3. Diverse teams.

The ability to work collaboratively in diverse teams is crucial for non-US founders as it fosters cross-cultural collaboration, enhances adaptability to foreign business environments, and promotes innovation and creativity. Embracing diversity enables them to build a broader network, navigate cultural sensitivities in communication, and make better-informed decisions. Additionally, it contributes to a positive reputation, attracting top talent, investors, and potential partners, ultimately supporting the success and growth of their businesses in a global market.

The more diverse your environment is, the faster and more effectively you can integrate into the innovation community in the USA.

Challenge #4. Reputation matters.

Work on your reputation and image. Reputation matters a lot here; well, actually, anywhere. Update your social networks, create a quality LinkedIn profile, attend events, make new connections, expand your network, and carefully build your reputation as a reliable, high-quality, and business-oriented individual with whom it’s pleasant to do business.

They say that first you work for your reputation then it works for you — always keep that in mind.

Challenge#5. Giving back to the community.

Giving back to the community is an essential principle in the innovation ecosystem. Find something you’re willing to give back, without expecting anything in return, just to help someone else. Contributing to the community enhances the founder’s reputation, attracting more support and opportunities. It enables startup founders to have a positive social impact and inspires further innovation, creating a cycle of support, growth, and collaboration that benefits both the innovator and the broader ecosystem.

The act of “giving back” will be appreciated, and you’ll not only find satisfaction but also receive positive attitudes towards yourself and your initiatives.

You are an early-stage startup seeking seed investors. Not an easy endeavor, at Vibranium.VC we know that first-hand. Your solution is great, you have a clear growth strategy and strong profit potential. If you think these are the key evaluation factors for investors — you are absolutely right.

But there is something else equally important — the startup’s team. And that’s exactly what we will dive into in this article.

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The 6Ts of startup screening

When evaluating a potential investment opportunity, we follow the 6T methodology, which was originally developed at Stanford University. Here are its main criteria:

TEAM — an A-team that has a vision, passion, and necessary skills

TAM — a large, growing, accessible, and strategic market

TECHNOLOGY — disruptive technology and/or a disruptive business model

TRACTION — customer, technical, market or product validation

TRENDS — why now? Micro shifts that support the thesis

TERMS — does the investment fit us? Is there any hair on this deal?

While performing due diligence, we carefully evaluate each element of the framework to understand whether we are comfortable investing in a given startup. It has to be a match!

Criteria within the 6T methodology follow a hierarchy of importance. Assessing the team itself is a priority for a number of VCs. If this element seems weak, in most cases the investor won’t even look at any other factors that follow.

By screening approximately 35 startups every month, we figured out that the majority of founders do not prioritize these criteria and focus mainly on technology, specific features, and the product itself. This misguided approach can actually result in the startup’s inability to secure the necessary funding.

Why the TEAM?

Is this an A-team? Do the employees have enough experience and a solid track record? Are they future champions? Have they ever failed? Do they run other businesses? All these questions are running through EVERY investor’s mind — trust us.

When it comes down to choosing between a strong product and a strong team, at Vibranium.VC we always go for the latter. A good team can pull off an average business model and improve the product by being resilient and experimenting.

We have witnessed many times how a great product idea never saw the light of day because the startup’s team could not take it to the next level of implementation. The ability to build a sustainable business around the product — this is what investors value most.

There aren’t many metrics that can be measured in a seed or pre-seed stage. This means we have to rely on assessments of “soft skills”: with this number of people, this kind of knowledge, and this experience — can the team make it happen?

Is motivation important?

One of the things that we often discuss with startups is the importance of the founding team’s motivation. Sometimes this factor is neglected. But in tough times of hardships and rejections that every startup goes through, the motivation of the founder and their team is key to success.

What drives you? Is it just making money, or do you have a bigger mission? Or maybe a personal attachment to the problem that you try to solve? Maybe you want to solve a global issue and help your community. Honest, self-aware answers to these questions are crucial.

If it is just about making money, then that motivation might not be enough. Investors want to see passion, adaptability, and good team dynamics. Some want a specific mix of skills. But most importantly, the reality is that the majority of investors want to see a team that has been there before (serial entrepreneurs). And no, this doesn’t mean having zero failures in the past — it means learning lessons and gaining experience from these failures in a way that later leads to success.

Silicon Valley is a dream destination of choice for establishing technology businesses. Many world famous companies such as Meta, Cisco, Google, Adobe, Apple, and other major tech giants have their HQs in Silicon Valley, and they continue to show great results and revenues operating from the region.

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But what if you are new to Silicon Valley? It’s ok not to know everything — trust us, Vibranium.VC knows exactly how it is.

We decided to chat with one of our Softlanding Program experts’ investment banker Shawn Flynn about common mistakes new founders make in Silicon Valley.

Shawn Flynn is a Principal at a premier middle-market investment bank with a global presence. Shawn has expertise in mergers and acquisitions, capital markets, financial restructuring, and secondaries. He is the host of the award-winning The Silicon Valley Podcast.

#1 Going to wrong events

Going to the wrong events might be a waste of time. Sometimes founders don’t check who are the attendees, or the topics, they just go “It’s an event — I’m going”. Don’t get me wrong, it’s always great for expanding your network and meeting new people, but what happens is you attend an event, spend an entire day there collecting as many business cards as you can, but none of those business cards result in new partnerships, new customers or potential investors for your company. That entire, precious day and all that energy could be considered almost a waste.

The first thing founders need to know when arriving in Silicon Valley is to be careful with their time. Everything should be strategically planned out: the events you go to, the people you talk to etc. You have a company that you’re here to grow. You are here to fulfill your dream. Make sure that you plan everything out accordingly.

# 2 Not knowing who to connect with

While Silicon Valley is home to many great people wanting to help startups succeed, there are also lots of scammers who take advantage of entrepreneurs. They may promise introductions to investors and other services in exchange for money; however, they often don’t know anyone or provide referrals to shady service providers that won’t be helpful. It’s important for entrepreneurs to do their due diligence and carefully vet any person or provider before making a commitment.

# 3 Coming only to fundraise, forgetting about sales

It’s not uncommon for startups to come to Silicon Valley solely to raise capital. However, this type of approach isn’t always the most effective; if they used those six months to increase their sales and revenue, they’d be in a much better position. Investors are likely to only invest once certain milestones have been reached or a certain amount of money has been made — so it’s important that entrepreneurs track the number of hours spent fundraising vs building the company and generating income. This helps maximize efficiency and ensure productivity with time management.

#4 Not tracking the right metrics

Investors are interested in certain metrics — lifetime value of a customer, cost of acquiring customers etc. But often founders go from one investor to another still not clearly knowing the metrics they need to show and that are crucial for THAT investor. Often entrepreneurs don’t track their monthly metrics to see how things change over time. But this is the KEY. You need to show investors where your company was yesterday, where it is today and where it going to be in foresee future by presenting numbers proving you are heading the right direction and getting more efficient.

Often investors are investing in what they believe is going to happen. And numbers make it more believable by giving support and validation. You might have all the numbers in the world but half of them are not representing any interest to investors. Find out in your sector what are the numbers investors want to see and start tracking them. Even if you are not currently fundraising, or even plan to take outside capital, it’s still good to do your homework and reach out to potential investors and industry leaders and ask them what metrics they want to see, now and let’s say a goal to hit in six months. Your goal is to get better than industry average to impress investors and to run just a better company overall.

#5 Not being adaptable

What works in one country may not be successful when brought to Silicon Valley. It’s essential to tailor materials, such as taglines, to the US market. Translating word for word without making any localization adjustments is likely to leave companies with substantially less success than they had back home.

#6 What got you here won’t get you there

The roles and responsibilities of the CEO and founders are constantly evolving as a company grows and especially if the growth is accelerated by rounds of funding from outside capital. Only a few people can quickly and effectively adapt to these changes, otherwise they become an obstacle for the company’s growth. Investors may bring in other personnel who can help take the company from one point to another; this requires entrepreneurs to be agile learners and adjust their mindset with every development that occurs.

Good luck in Silicon Valley! Everything is possible — always remember that!

Raising money when you are an early-stage startup might be challenging, and, let’s be honest, quite stressful. Hearing “no” from one investor after another can be distressing and disheartening, but remember this: odds are, you may get tons of “no’s”, before you get that much-awaited “yes”. Rejection is part of the process. Doing your homework and being prepared is crucial to fundraising success.

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In this article, we will outline 6 key steps startups go through before the investment fund makes a final funding decision.

Inside the investor’s mind

A VC fund’s end goal is to increase the value of the startup, then profitably exit the investment by either selling its stake or via an initial public offering (IPO). There are four types of players in the venture capital industry:

• Entrepreneurs who start companies and need funding to pursue their vision;
• Investors who are willing to take on significant risk to pursue impressive returns (the risk is high, especially at the early stage);
• Investment bankers who have financial services industry expertise, analytical prowess, and effective communication skills to support institutional clients in activities like capital raising and mergers and acquisitions;
• Venture capitalists who profit by creating markets for entrepreneurs, investors, and bankers.

An investor’s decision-making is based on three main pillars:

• Earning money;
• Diversifying an investment portfolio;
• Finding a strategic asset.

These are the questions investors need answers to: is this a growing market and technology? How fast will this company develop? Would we be proud to have this company in our portfolio? How open is the team to training and feedback? How will I exit from this deal? Will this require a lot of my time? Answers to these questions are important to forming the final investment decision. But let’s not get ahead of ourselves.

Step #1 Prescreening

Before you reach out to a potential investor, make sure to carefully read the list of metrics you need to present and the criteria you need to fulfill. In our case, for example, these are posted on the Vibranium.VC website. Overlooking this step is actually a common mistake new founders make. We covered it in our previous post (check out Mistake #4). Remember that prescreening is an analysis — the scout evaluates whether the startup is in the fund’s area of focus.

If your startup does not meet all the necessary criteria chances are high you will be recommended to work on your current metrics towards improvement and apply later. Getting a “no” from an investor is all part of the venture capital journey.

Before moving forward, it’s crucial to fix all the weak points flagged during the application process. Based on our experience, exceptions are rarely made — time is money in the investment community.

Step #2 Primary screening

A VC analyst evaluates the team, market, technology, and business model in line with the 6T methodology which consists of the following elements:

• TEAM — an A-team that has a vision, passion, and necessary skills
• TAM — a large, growing, accessible and strategic market
• TECHNOLOGY — disruptive technology and/or a disruptive business model
• TRACTION — customer, technical, market, or product validation
• TRENDS — why now? Micro shifts that support the thesis
• TERMS — does the investment fit us? Is there any hair on this deal?

Every fund has its own screening process, but almost everyone pays attention to the team, traction, and terms.

Step #3 Interview with an Investment Manager

The Investment Manager looks at the business model, the technology and the o market strategy. This is when the fund and the startup talk about various metrics: current revenue figures, customer acquisition cost, LTV, and so on. These numbers can better demonstrate how exactly the business model is functioning. The investment manager asks about the tech looks “under the hood” at the product frontend and backend, and checks the demo version. Generally, there are also a few questions related to PR & marketing strategy.

Step #4 Interview with the General Partner

The GP evaluates the market and the deal in question. He or she interviews founders about the team, the sales process, the current market situation, competitor’s advantages, current transaction parameters, deal structure l, and involvement of other parties. At this point, it is important to have a clear understanding of whether the startup already has a lead investor, and what investments they had before (if any). The fund also needs to know startup’s investment strategy regarding the next round and be able to visualize potential exit opportunities.

Step #5 Due diligence

Due diligence is a form of a comprehensive assessment that an investor carries out before proceeding with the deal.

Typically, funds first sign a term sheet, which details the main aspects of the transaction. After that, they go through with due diligence to ensure everything is in order with the company.

However, we at Vibranium.VC have our own approach to this process. We move forward with due diligence prior to making an investment decision so that we can have as much clarity on the startup as possible. That way, we can flag any potential risks in advance and discuss ways of fixing issues with the founders before actually negotiating the terms of the deal.

P.S. We will dive deeper into the due diligence process in our next post, so stay tuned!

Step #6 Investment Committee

An investment committee is a group of people responsible for managing an organization’s investments. The committee oversees investment policies, advisor selection, strategy, and fund performance to ensure the best possible outcome for members or beneficiaries.

The investment committee makes the final decision on whether to close a deal (= to invest in a startup), which is based on the outcomes of all of the previous steps.

The whole process from the moment you applied for investment until you got your final answer takes up to two months.

Starting a new business can be overwhelming. A coach who has been through the process before can provide you with meaningful guidance and support. Startup coaching can help you clarify business goals, refine a strategy, and develop a roadmap to success. On top of that, you might receive insights and perspectives on your business that you may not have considered before.

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Overall, startup coaching can be a valuable investment for entrepreneurs who are looking to build their businesses more effectively.

There are many different options available, from one-on-one coaching to group coaching programs. With the right guidance and support, you can navigate the challenges of starting a new business and achieve your goals more efficiently.

At Vibranium.VC we are always happy to welcome new insightful speakers to our blog. So today we are talking to Joshin Das. Joshin is the founder of IT solutions provider Oligosoft Corp, a mentor for university students from South Korea, the UK and UAE under EPIR (Early Stage Preparation for Industry Readiness) program offered for Economics, Business, Management, Technical and Legal students, as well as a startup coach.

Startup coach/mentor — who is she/he?

It’s an experienced individual who provides guidance and support to early-stage entrepreneurs and their startups. These kinds of coaches advise and consult in strategy, marketing, finance, and management to help startups address the challenges they face while growing as a business.

Preferably startup coaches/mentors possess direct experience as entrepreneurs, have worked with multiple startups, or have expertise in specific industries. They may work with individual founders or teams, and provide individual coaching or group mentoring sessions in person or virtually.

What can you get out of mentorship?

• Networking: Mentors can introduce or connect startups with potential customers, investors, partners, and other industry experts.
• Accountability: Mentors can hold founders accountable for their goals and help them stay on track. They can provide constructive feedback and suggestions, or sometimes question incorrect assumptions made by founders.
• Perspective: Mentors can offer a different perspective on a startup’s business model, product, or strategy. They are able to identify blind spots that can help founders alter their course or make better decisions.
• Emotional support: Mentors can offer emotional support, encouragement, and motivation to boost morale, which is crucial to overcoming obstacles and staying focused on goals.
• Credibility: A reputable mentor may add credibility to the business idea and the startup team.

Where can you find the perfect coach?

Incubators and accelerators that offer mentorship programs are a great place to find the perfect coach. There are also plenty of online platforms that connect startups with mentors.

Another place to look for is trade associations and organizations that have mentorship programs lead by experienced professionals or industry veterans.

And never underestimate the power of networking events — there are lots of opportunities to meet your future coach who can really play a crucial role (in a good way) in your business.

When does a startup no longer need coaching

A startup can benefit from coaching or mentoring at any stage of its development. However, a startup may discontinue its mentorship program in a few scenarios. Number one: if it achieved sustainable growth and has a business model in place that is generating revenue. Number two: when the startup built a strong team with the skills and talent needed to run the business. Number three: if it received external validation in the form of funding, awards, or recognition from industry experts.

Even if a startup no longer needs consistent coaching, it may still benefit from occasional check-ins or advisory services from a mentor or coach. This can help the startup stay on track, remain focused, and identify new trends and avenues for growth.

Сoaching can sometimes turn into a professional partnership. As the startup grows and evolves, its needs may change, and the coach may offer additional services or consultations. The coach may eventually become an advisor or consultant to the startup. A mentor turning into a business partner or investor is also not rare.

When might a coach help?

• Validation of the idea, and product market fit, identifying target markets, and business strategy development.
• Financial planning, creating financial projections and fundraising. Startups may need guidance for product development and R&D.
• Sales and marketing, creating marketing plans, developing sales strategies, and identifying channels to reach target audiences.
• Team building, developing processes for effective recruitment, and establishing a strong organizational culture.
• Startups also may seek advice from mentors with specific industry expertise (energy, pharma, telecom, tech and so on), to help them navigate unique challenges and opportunities in their field.

Lots of events happening in a startup community every day and they are all about networking. Founders pitching their startups to investors, entrepreneurs meeting companies to discuss potential cooperation, etc. Networking might and often lead to a successful collaboration.

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80% of professionals find networking essential to their career success, almost 100% believe that face-to-face meetings build stronger long-term relationships, and 41% want to network more often.

Do you want to expand your network of contacts? Here are five essential networking mistakes to avoid in the innovation community based on Vibranium.VC’ observation.

Mistake № 1

Attending an event with someone you already know and staying with this person the entire time or talking only to someone you already know for too long.

Business events are the source of useful networking, but by sticking to only one person you are missing the opportunity to expand your circle of contacts. In order to avoid this situation follow this simple 10-minute rule — make sure you talk to as many people as possible, allowing yourself to spend not more than 10 minute with each one. Start with introducing yourself, let them introduce themselves as well and make your conversation straight to the point — ask questions and try to be involved in the topic. Sometimes it’s a good opportunity to pitch your project, but don’t be pushy — this might give an opposite result of the one you expect. Exchange contacts and move on to the next person by politely letting them know. It’s totally okay to move to the next person because that’s what networking is about.

Mistake № 2

Be carried away and take over the conversation or oversell yourself for the sake of your startup.

By boasting about yourself or your achievements you are not allowing other people to be fully engaged in conversation. Founders are leaders by nature passionate about what they do and always ready to pitch their project even when it is not necessary. Try to make your stories short, keeping in mind bullet points you want to mention — don’t turn a potential dialogue into a monologue.

Mistake № 3

Going overboard with jokes or comments.

Always be cautious about your messages, try to avoid sensitive topics related to religion, politics and other beliefs. Networking is about talking business, sharing experience and getting acquainted with the best practices. Inappropriate comments might put your interlocutor in an awkward position. And this is not what you are aiming for in this conversation. Also by trying to break the ice don’t go too personal towards other people — this might be perceived in a wrong way. Your goal is to make a professional contact rather than a personal one — always keep that in mind.

Mistake № 4

Not having your contacts handy.

When you talk to somebody for a few minutes the next important step — contacts exchange, especially if you believe that this is mutually beneficial to you and another person. It can be a QR code with your LinkedIn profile or a business card. It can be some other way of connecting like a messenger. While going to networking events, always make sure to have those contacts handy.

Mistake № 5

Not following up after the event.

This is the most crucial networking mistake you can possibly make. You met a person, exchanged contacts and then…silence. It means that all your efforts were pointless. Always make a short follow up whether it’s a Linkedin msg or short e-mail — reconnection is a key. To maintain a contact is your main task after each networking event. If you spoke about your startup, reaching out might be a good opportunity to send a link to the webpage or one pager about your company. Following up is always a nice gesture to give a little reminder about yourself — there are many people attending the event, lots of conversations happening, so it’s challenging to remember everyone.

Being at the event is a first step, getting into quick conversation and exchanging contacts is a second one and then after a follow up you need to try to build that relationship further.