Will VC invest in a first time entrepreneur

[Tarun Arora]

Recently I went to a TIE member networking event, these are casual events without any agenda for folks to basically network with like minded people/seek opportunities.

Had a chance to talk to a VC over there and I asked him what it will take for a VC to invest in a first time entrepreneur and if VC will invest at an early stage. The answer to both is negative. As is a well known fact, VCs like to invest when a start up is on a growth path and they can clearly see a market. Some VCs like to see a market opportunity in the range of $ 300 million to $ 500 million to invest. (Honestly I find this un-realistic as I am sure You tube, MySpace etc had no idea if the market even existed when they started. They just had something they thought will be a cool idea and it spread like wild fire)

Early finding might be possible but it is mostly given to serial entrepreneurs and Sr executives with a clear success record.

So where does that leave someone who is a first time entrepreneur and not had a trailblazing career at a fortune 100 company. After browsing some resources & my own thoughts, I guess the best path is bootstrapping . The advantages for doing so are clear.

1. Most of the time entrepreneur is the only one who sees an opportunity in the initial stages. He needs the freedom to create the product without someone breathing down the neck for execution.

2. Entrepreneurship is all about risks and believing in yourself. That's what keeps you motivated and going. Investing own money will keep you on the right track. It also shows to others that you are willing to risk time & money on your ideas and make the product more sellable down the line.

3. Investments from professional investors come with a lot of strings and you might be forced to dilute your ideas. After all nothing comes for free. 4. Once the product is at a POC level and a clear market opportunity is seen, one might want to approach angel investors and gain their expertise as well as some funds.

Thoughts welcome ...

Cheers