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SaaStock CheatSheet Think Like a VC

THINK LIKE A VC. together with MemoHub

THINK LIKE A VC There's no silver bullet when it comes to raising capital, but getting into the mindset of a VC could help you get the right funding, at the right time. With a bit of grit, and a lot of know-how, your SaaS could be the next big unicorn. A business plan Mock-ups Product ideas Customer-base ideas At this stage, an investor is only going to invest for one of two reasons: 1) Proven entrepreneur at the helm 2) A very hot market Hypothesis Stage Ready to confront the market In this stage you need to validate that you can build a product. A product that people want to test, use and keep using. You’re not building a leaky bucket. You need to validate the marketing, too. You know: How to attract and where to acquire customers. Ask yourself: 1) Are people interested in my solution? 2) Do I understand their painpoints? 3) Are they ready to pay for it?

THINK LIKE A VC Don't try to raise too early in the validation stage. A VC shouldn’t need to do the thinking at any point: why they should invest should be evident. Betting is only worth it if the value outweighs the risks. A VC will ask him/herself: Is this team capable of validating the product? Is there a real market? Are they capable of the distribution? Weigh up your options. Think about what you can validate without any funding. The validation stage has no set length. It can take you six months if you’ve stumbled upon a great idea. It can take 18 months or even two years, for example, if you can’t generate retention on your product. Think about what you’ve done, and what you want to do. What you can validate without capital. Communicate that to the VC. The higher up in the funnel you are, the better. Once you’ve validated the above, you’ll most likely find Product Market Fit. Hypothesis stage Validation stage Now, if you have a 5k, 20k, 30k MRR startup, the bet that a VC wants to make is: Can they become a 10MM ARR or MRR company? 15MM? 20MM?

THINK LIKE A VC Now look at: 1) Your PMF from a market point of view: can your market scale? 2) Do you have room to build a big company from the product point of view? You need to show a VC: 1) You’ve built a product that is defensible: it wins in the market segment. 2) You can scale your acquisition (if you understand acquisition at this point, you can double down on it). Understand where you are in the startup cycle, and be clear and honest about that stage. See what you can do with and without raising funding. If you can’t go further without the money, align your expectations. Don't expect to raise capital if your business will fail without it. Join a private community of ambitious SaaS Founders, and scale faster together. APPLY NOW