Medical Entrepreneurs – Take Note!
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Recently, I was reading the limited partner quarterly updates for a fund where I’m an investor. In the update, the author highlighted that the fund had reviewed 1,000 potential deals last year and invested in four companies. At a ratio of 250:1, it’s clear that there are many more startups trying to raise a Series A than there are Series A investments (see the Series A crunch talked about four years ago).
Here’s how the investment process might work at a venture fund:
- 250 deals reviewed
- 25 one-on-one pitches (where the entrepreneur pitches a single partner)
- 5 full partner pitches (where all the partners hear the pitch)
- 2 term sheets
- 1 investment
Raising money is much harder than most entrepreneurs expect. With funds seeing so many opportunities, but only being able to invest in 1-2 companies per year per investor, it’s clear that most entrepreneurs will feel rejected when out raising…
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