What West Coast VCs are looking for at the 24th Angel Forum

The West Coast’s investor and startup communities came together today at the SFU Harbour Centre for the 24th Angel Forum, a chance for companies to pitch their wares in front of the people who can take their enterprise to the next level. The Forumn started with a session entitled “What VCs look for”, a guide for investors to the methodology of getting funding from VCs.

VCs are primarily looking for technology-based companies with strong management that preferably have seen a few foundings and exits prior to their current venture. Another very important factor is whether a potential investment opportunity is aiming at a market with a big payoff, in the neighbourhood of $500 million or higher.

As a rule of thumb, a VC will see 80 to 100 business approaches a year, and 20 of those will get to a pitch meeting, four will get detailed due diligence, two will get a term sheet and one will receive funding.

VCs also look for the “four Ms”, defined as “Magic,” or the “bleeding from the neck problem” that a company is solving, the market that company is targeting, the management of the company (and what holes need to be filled within that management structure), and of course, money.