Startup Founders - Aligning with Venture Capitalists

You mentioned the difficulty in engaging with VCs and becoming aligned, in terms of their business model return and projections. What are the most difficult engagements or interactions that you’ve had with VCs and how do you navigate that difficulty in alignment?

There are a couple of areas. VCs have a certain set of expectations, depending on the other businesses that they have seen. They have a certain set of metrics which is how they evaluate most of the businesses. Your business, let’s say, is a new business, and you have a different way to look at new business and you have a new set of metrics. I think the biggest gap between aligning on the way you think about your business and how it could, potentially, be different from the other set of metrics, for other businesses that they have evaluated. The way to do that is, yes, you build those relationships over a long period of time. You provide the set of metrics that you think are more in line with how you think about your business. You show the implementation of those metrics and you show continuous projections, with the goals and the profitability, based on the performance of those metrics. Then, I think, investors will become a little bit more comfortable, over time that, yes, those could be the right metrics, for this particular set of businesses.

That becomes much more challenging, to align on the right set of metrics, how you measure the performance of the business and what could the right growth path be, for that business. So you are not burning a lot of money, but you are showing enough growth and you are showing a constant path to profitability, as well.