At the early stage of a startup, venture capitalists (VCs) are looking for a number of key things to determine whether or not they should invest. These include:
1. A strong and passionate founding team: VCs want to see a team that is committed to the success of the company and has the skills and experience necessary to execute on the business plan.
2. A compelling vision: VCs are looking for startups that have a clear and compelling vision for the future, and a plan for how they will achieve it. This includes a clear understanding of the problem the startup is solving, the market opportunity, and the competitive landscape.
3. A unique value proposition: VCs want to see that a startup has something unique to offer, whether it's a novel product or service, a unique business model, or a superior technology.
4. Traction: While it's difficult for a startup to have significant traction at the early stage, VCs still want to see some signs of progress. This could include early customer adoption, partnerships, or progress on key milestones.
5. A realistic and achievable financial plan: VCs will want to see a solid financial plan that outlines how the startup plans to use their investment to achieve growth and profitability. This should include projected revenue and expense projections, as well as a clear understanding of the key drivers of the business.
Overall, VCs are looking for startups that have the potential to solve significant problems, create value, and achieve significant growth. By demonstrating a strong founding team, a compelling vision, a unique value proposition, traction, and a realistic financial plan, startups can increase their chances of securing VC funding at the early stage.