Not too long ago I was a twenty something year old first-time entrepreneur kicking down the doors of any Venture Capitalist that would look my way. I had a great idea, good traction, and even more energy, but little chance of ever raising money. I went to conferences, I got referrals, and I jumped at every opportunity to get my pitch in front of the right people, but for the most part I was fighting a losing battle.

After seeing the VC cycle up close, I have a few suggestions specifically for first-time entrepreneurs that will hopefully save you some of the heart-ache I had to endure.

• For every great idea, there are 500 others exactly like it

Yes, I had heard this a few hundred times too, but I really didn’t believe it because MY idea was not just another social network. It was a Hispanic based telephone recruiting platform. But now that I see the type of deal flow VC’s see, I am surprised that anything can be considered unique. There are thousands upon thousands of businesses floating around. Having a great idea just isn’t enough.

• Nothing gets a “no” faster than a bad fit

VC’s have criteria for the investments they make and very rarely will they deviate. The odds for success are pretty low in the start-up game, so if a VC is going to invest they are going to have clear guidelines about their areas of expertise. So save yourself some time and make sure you filter who you send your executive summary to.

• You absolutely must have traction

Before you start a business, make sure you can get it to a point where you have some form of traction before you need VC funding. There is no way you will get money from institutional investors unless you can show that someone, anyone, likes your product. This is due-diligence step number one. Secondly, without traction there are no numbers to crunch, which is what MBA bearing VC’s love to do.

• Get solid people excited about your company

At the end of the day, being a startup founder means your number one mission in life will be to persuade others. You will need to find employees who will be willing to work for less. You will need to convince customers to try your product/service. You will need to persuade partners to work with you. And of course, you will need to find investors to fund your company. If you can’t get your friends/family/accountant/lawyer to get excited about what you are doing, then you will have a tough time building a successful company. So show the VC’s how persuasive you are and find a few people who truly love what you are doing and who will introduce you to VC’s or people who know VC’s.

• Think about other sources of funding

At the end of the day, getting VC funding as a young first time entrepreneur is very hard. This is compounded if your father in law isn’t Jim Clark and you don’t know any VC’s personally. So while you might be the next Zuckerburg, it would be a prudent move to hedge your bets and build a company that can survive without institutional money.

• Keep the business plan, send the executive summary

This goes back to the deal-flow issue I mentioned above, so many plans come across a VC’s desk on a given day that he/she has to filter them quickly. It just takes too long to go over a full-business plan and even an executive summary, so make sure you put all of the most important information on a one or two page summary and highlight the very key points in your email.

So if you have an executive summary for a business with some traction in an industry that fits Momentum’s criteria, please send it our way.

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