How do you adjust your VC strategy for the startup lifecycle?

1 Ideation stage

The ideation stage is when entrepreneurs come up with a novel idea for a product or service that solves a problem or fills a gap in the market. At this stage, your VC strategy should focus on finding and evaluating the most promising ideas and teams, as well as providing seed funding, mentorship, and feedback. You should look for signs of creativity, passion, domain expertise, and market potential in the founders and their vision. You should also be prepared to take more risks and accept more uncertainty, as the idea may not have a clear product-market fit or a validated business model yet.

2 Validation stage

The validation stage is when startups test their assumptions and hypotheses about their product, market, and customers. They use various methods, such as prototyping, customer interviews, surveys, and experiments, to validate their value proposition and find a product-market fit. At this stage, your VC strategy should focus on helping the startups achieve product-market fit and traction, as well as providing early-stage funding, connections, and guidance. You should look for signs of customer validation, user growth, revenue generation, and competitive advantage in the startups and their products. You should also be prepared to pivot or exit if the validation results are negative or inconclusive.

3 Growth stage

The growth stage is when startups scale their product, market, and team to reach a larger and more diverse customer base. They use various strategies, such as marketing, sales, partnerships, and expansion, to grow their revenue, market share, and brand awareness. At this stage, your VC strategy should focus on supporting the startups' growth and sustainability, as well as providing growth-stage funding, resources, and advice. You should look for signs of scalability, profitability, retention, and differentiation in the startups and their products. You should also be prepared to face more competition, regulation, and complexity, as the startups enter new markets and segments.