How Do Venture Capitalists Evaluate Investment Opportunities? | John Colley | Skillshare

How Do Venture Capitalists Evaluate Investment Opportunities?

John Colley, Discover Online Courses and Marketing

Play Speed
  • 0.5x
  • 1x (Normal)
  • 1.25x
  • 1.5x
  • 2x
14 Videos (1h 5m)
    • The VC Perspective How do VCs Evaluate Deals

    • What Factors are important to Venture Capitalists?

    • Considering Valuation from the Venture Capitalist’s Perspective

    • How do Investors Value Startups?

    • How Do Investors Value a Series A Investment?

    • How do VCs Evaluate a Market?

    • What do VCs think about your Product or Service?

    • How do VCs evaluate You and Your Management Team?

    • Why is Exit Strategy important to VCs?

    • Why are Barriers to Entry important?

    • How do VCs Evaluate Your Competition

    • What Financial Information is important to VCs

    • What is the typical VC Decision Making Process?

    • Project Evaluate Your Startup


About This Class


This course is designed to help you to evaluate your startup/business as a potential investor would look at you.

This is all about putting yourself in the shoes of the VC and discovering how to think like he does. By understanding his perspective, you will greatly improve your ability to present your business to VCs in terms that they understand.  There is a Project at the end of this section to help you implement what you are about to discover here.

What Factors are important to VCs?

If you understand what is important to a Venture Capitalist, it is easier to pitch your deal in terms that he will understand and which will help to make your deal more attractive than other deals that he is looking at.

Considering Valuation from the VC Perspective

Venture Capitalists will certainly approach valuation from a different perspective to you and will end up with (almost certainly) a lower number than you will.  This lecture explains the "rule of thumb" rules you can expect them to apply when considering the value of your company.

How do Investors value a Startup?

At the Seed and Angel stage, valuation of a business with few revenues, no profits which burns cash can be problematic. In this lecture I share a simple formula for arriving at a valuation which can then be discussed and negotiated by both sides.

How do Investors Value a Series A Investment?

When you get to the Series A investment stage, you can use the company's revenues and, if they exist, EBITDA, to arrive at an initial valuation. This lecture outlines the method for doing this.

How do VCs look at your Market?

Market Size is one of the three critical factors that Venture Capital investors will look at closely.  The other two being product and team. This lecture shares their perspective with you and should help you to scope your presentation of your addressable market in their terms.

What do VCs think about your Product or Service?

The product evaluation process is a critical one and Venture Capitalists can expect to complete this due diligence thoroughly.  This lecture explains the steps you may expect them to take and will help you to prepare so that you can meet their expectations.

How do VCs evaluate You and your Management Team?

The evaluation of management is one of the most important parts of the investment process and you can expect that you and your team will be scrutinised in great detail.  This lecture will help you to manage that process by understanding what the VCs are looking for.

Why is Exit Strategy important to VCs?

Venture Capitalists make investments so that they can make money down the line and a strong, highly valued exit is a critical component of that process. They want to know before they go in, how they are going to get out.This lecture sheds some light on the way the Venture Capitalists think about Exit Strategies and therefore how you must think about them too.

Why are Barriers to Entry important?

Barriers to entry are an important factor in both margins and exit strategy and are therefore considered carefully by Venture Capitalists.  In this lecture I explain some of these and why they are important.  You must be able to explain your barriers to entry to prospective investors.

How do VCs consider your Competition?

Venture Capitalists want to invest in market leaders and they therefore evaluate the competitive landscape very carefully.  This lecture explains their approach and why you need to have as good a grip on who your competitors are as they do.

What Financial Information is important to VCs?

Venture Capitalists need to be able to understand the historic and projected financial performance of your company.  They see hundreds of plans and they know what they are looking for.  If you don't provide what they need then you are reducing your chances of getting to that first meeting.  In this lecture I tell you what financial information you need to provide and its a lot easier than you may think.

What is the typical VC Decision Making Process?

Venture Capitalists are continually evaluating deals to ensure that they are investing in the best deals,  You need to understand how they think and the criteria they are evaluating you and your competing entrepreneurs against to ensure that you can position yourself in the best possible position to get an investment.





  • --
  • Beginner
  • Intermediate
  • Advanced
  • All Levels
  • Beg/Int
  • Int/Adv


Community Generated

The level is determined by a majority opinion of students who have reviewed this class. The teacher's recommendation is shown until at least 5 student responses are collected.

John Colley

Discover Online Courses and Marketing

Exceed Your Own Potential! Join My Student Community Today!

Here is a little bit about Me...

Cambridge University Graduate

I have a Bachelors and a Masters Degree from Cambridge University in the UK (Magdalene College)

Master of Business Administration

I graduated from Cass Business School in 1992 with an MBA with Distinction and also won the Tallow Chandler's prize for the best Dissertation.

British Army Officer

I spent nine years as a Commiss...

See full profile

Report class