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 OK - so you've passed the test of "What do they do?" (see: Behind Closed Doors - PT 1). Now comes the next set of words you don't want to hear with your ear pressed to the OVP conference room door...
"Who cares?"
So, you think we're just being rude? (Well, maybe) But, in reality those words level a verdict on the startup as falling into one of two traps...
Either the company is serving a market that is just too small to scale, or is offering a product that is in the "nice to have" category rather than "have to have."
Recognize that institutional venture capitalists fund a remarkably small percentage of startups (less than 1% by some calculations). The reason is that the overwhelming majority of new companies will never be able to grow at the explosive rates to the major scale that VCs need to make their economics work. That's not a slam on those other 99% of startups! It just means they should look for funding someplace else.
This reminds me of an entrepreneur who came to see us some years ago. He had bootstrapped his company over 5 or 6 years to about $10M in annual sales. He was taking home over $1M a year personally from the enterprise. My first question to him was, "Why in the world are you here? Go, home. You don't need us!"
The flip side can also be true, as in "we don't need you."
Before you visit with VCs ask yourself (or a trusted service provider who caters to startups), "Is this really a VC deal?" If so, we'd love to see you. But if not, that's perfectly OK. Just spend your valuable time with potential investors more likely to find your idea compelling.
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