A Startup that can't raise enough capital. Well, this one is sort of obvious and sort of tragic and, unfortunately, it happens all the time. So let's talk about what it takes to raise capital from investors with an emphasis on VC investors. The reason is that angel investors who can be an asset to a company play the game the VC way, so understanding VC's leads to understanding quality angel investors. First, to set expectations, in a given year, remember that about 3% of startup deals that get their first serious funding that year, actually get funding from institutional investors, primarily VC investors, the rest get it from angel investors.
The Stanford research provides some good insights about how to envision this process. First, "The average firm in our sample screens more than 200 companies and makes only four investments in a given year." This speaks to the low probability of raising money from VCs unless you have a crisp, clear strategy that you can execute.
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