Not every battle is worth fighting, and you are not going to be on the winning side of every catfight you are going to take in your market. Hence, it is more than being prudent to be selective in the battles you fight. This way you will be able to concentrate on things that matter for the success of your business, and this is what a venture capitalist is interested in looking.
A venture capitalist is a far more experienced person, and he is well aware of signs and symbols of a failed proposition. His eyes and ears are well-tuned to look for such signs, and as soon as he sees such sign in a proposal, his defense mechanism kicks in, and the proposal is refused.
Ways to avoid refusal and guarantee an interview
Narrow down your niche
In the process of defining your battle you need to understand that the venture capitalist you are sending your proposal to knows that it is hard, for a newcomer, to enter a big market from the front door and make a bang. Actually, the first proposal to go flying down into a trash bin is the one that suggests entry into a market from the front door.
He wants to see a proposal that suggests a creative and novel way of entering into a market. He wants to see a perfect flanking strategy in your proposal. So there is no need to tell the venture guy that you are going to rule the niche. He is not a 12-grader, he will not get sold.
Do SWOT and prioritize everything
I know many people cringe on just the mention of SWOT… oh no, not again….
But it is necessary to do a SWOT (Strength, Weakness, Opportunity, and Threat) analysis of your market, competition, customers, vis-à-vis your product idea you are pitching. This gives you an opportunity to think beyond what is easily graspable. The lateral thinking will result in a deeper understanding of your market, product, and customers. This venture capitalist is going to love.
Taking SWOT analysis one step further, I am going to suggest that you should prioritize the points that you find during the analysis, at least the bullets mentioned under opportunity and threat columns. This will help you understand what the pressing concerns are and what could be delayed in the first phase. Communicating this to a venture capitalist will gain you many reward points.
A proper business plan and presentation
Nothing except a well-laid business plan will pass for the business plan. A venture capitalist will not accept anything else. He wants to see a proper business plan with details of product planning, marketing activities you will undertake, your distribution (if applicable), and future projection of return, broken down under long-term and short-term headings.
You should take a conservative measure when giving monetary projection for future, showing too much may present you in a wrong light. No one likes to invest with inexperienced. Being too conservative is also not good, so make sure you do all your calculations two times over before showing the result to a venture capitalist.
The other thing that you need to show a venture capitalist is a well-made PowerPoint presentation. Although he wants everything in form of a business plan, he wants to see the gist of the business plan in presentation. Many a time decision of investing or not are taken during presentation itself.
Make sure your case does not get dropped on this level, so have all the important charts and graphs and bullets ion presentation. Having said that I will suggest you not to make your PPT verbose or 200-slide long; keep it simple and succinct.
You need to keep all these in mind when pitching your business to a venture capitalist. This will reduce your chances of rejection.