photo credit: marfis75

Techcrunch has an excellent guest post by Venture Capitalist Raj Kapoor of the Mayfield Fund who advises start up companies on how to approach a VC firm for funding. It is indeed a great read and what makes it more special is the source where it is a coming from - a VC himself.

Some points that Raj enlists can be a make or break for start up companies especially where lack of research or insight makes the start up companies believe that there is no competition for them online. The best line that Raj pitches for start ups for me is:

Your Real Competitive Advantage is Being Different In The Long Term.  On the internet, there are at least 25 companies that are or can compete with you on almost anything you do.  Often times, it’s all about execution but we want to see if there are fundamental factors which will help you outdo your competition—very hard technology/IP, network effects in your business that will make it hard for others to catch up (such as with Wikipedia, Google AdSense, Facebook, Twitter) or a fundamentally different business model that will be hard for an incumbent to change (for instance, it wouldn’t be easy for Electronic Arts to cannibalize its retail games with free to play online versions).

Here is the link to the post on Techcrunch: http://www.techcrunch.com/2009/12/13/how-to-pitch-vc/

Once you start thinking more and more like the VC does, you are bound to make reasonable arguments in favor of and against the proposal that you have just worked on.