There are a plethora of successful companies that have been built on college campuses. From Dell to Facebook to Insomnia Cookies. When it comes to securing funding, many of the metrics venture capitalists typically use apply: evaluations of the team, product, market, business model,
growth and timing. The list goes on.
growth and timing. The list goes on.
However, throughout my time assisting VCs in investing in student startups as a scout, I have noticed four characteristics they tend to look for uniquely in student founding teams.
- Proof points do not have to be far-reaching but have to be strong. This should be backed by tangible evidence, such as the smiling cohort curve. This is the idea that the initial users are retained and that you are increasing share of wallet with them, even if they are few in numbers. VCs tend to put less emphasis on scale for students when it comes to startup credibility.
- Measured expectations of growth is important. This demonstrates understanding of their product, market and unique context -- being in school full time, students have many other responsibilities. Founders generally have big ambitions and want to accomplish a variety of goals. We remind them to focus on what they need to do at their stage in the startup
journey in order to expand over time — it is about the long game. - Ability to scale is vital. Student startups oftentimes have leaner resources, making it more important that there isn’t much incremental work necessary to grow. If a new team member is needed to support every five new clients, it will make growth more time consuming and expensive -- difficulties that can be harder for students to bear.
- Ability to leverage your network. While a student founder network may be smaller or less relevant to their startup, the ability to leverage it signals ability to be scrappy in overcoming struggles and accelerating growth in the future. Nothing makes VCs want to help someone else more than someone who works hard to help themselves.
In sum, strength in these four areas have separated successful student startups from the rest in securing funding from VCs.