Startups Worth Investing in Venture Capital

In developing their business, startups can also get additional energy from investors. There are various types of investors, and venture capital (VC) is one of those types of investors. With my experience in Ideosource Venture Capital, I can draw a common thread about what kind of startup is worth investing in VCs like us. Of course there are differences between VCs, and not all (good) businesses are suitable for VC funding.

Real Problems, Big Market, Executable Solutions

A good startup should try to solve a real problem experienced by market the big one. The solution they provide must make sense, and also prove to be the right solution. I've discussed this in my other posts.

Sustainable, Scalable

This is an equally important condition for a startup to be attractive to VCs.

Sustainable it means the business is sustainable, will live long enough, and not seasonal. Businesses that only exist in the durian season, in the new student registration season, or which will only last 1-2 years are examples of businesses that do not sustainable.

Meanwhile, scalablemeaning that the business can grow to reach a large scale, but predictable growth costis more sloping than its income growth (currently or in the future). For example, a project-based business is not a scalable, because cost grow in proportion to the size revenue which (will) be obtained.

Founders

All of the above, will be largely determined by ability founder to plan and execute. Founder should be more than one person, ideally between 2-4 people.

Founder there are at least two people with skill different, namely product/technology development and business development. Founder only one person is too risky because if founder experiencing something like pain or confusion - yes, I'm not kidding about it - then the startup process can be very disrupted without being able to balance it founder another.

Too many founder also not ideal, because it can cause complexity in making decisions and cause many problems in the future, especially related to the unequal contribution from them as the company grows.

- guest postThis is a republish of an article on Andrias' personal blog with permission and has been edited.

Andrias Ekoyuono is VP Business Development at Ideosource Venture Capital. He can be contacted at andrias [at] gmail [dot] com