Is Your Business Idea Too Weird for a VC? If your business doesn't firmly fit the mold, don't be discouraged.
By Sam Hogg
Opinions expressed by Entrepreneur contributors are their own.
One piece of advice I give to entrepreneurs about approaching venture capitalists is to avoid going into a pitch meeting blind. I tell them to do their homework and find out what types of companies the firm invests in based on sector, stage of investments and other factors. Much of this information can be found on a firm's website.
But what happens when you can't find any overlap? What if your industry doesn't exist yet? Don't be discouraged. It could mean you've developed something truly innovative.
Remember that VCs exist to build companies into blue-sky markets that could turn millions of dollars into billions. If your product or company doesn't fit the mold of, say, biotech, software or social media, don't lose hope. There was a not-so-distant time when nobody knew what those things were.
Take Nest, the manufacturer of an internet-connected thermostat for the home. Its $3.2 billion purchase by Google legitimized the "connected home" category. Countless new startups have rushed into the space, heralding tech's next big move to the Internet of Things.
Wearables and the sharing economy are two other multibillion-dollar categories that didn't exist five years ago. Back then, if you were pitching a smartwatch to a VC investing out of a fund raised in 2010, there's no way their original investment thesis, partner experience or track record would indicate a willingness to invest in you.
So what is an entrepreneur to do with an idea that could create an industry from scratch? Pitch it hard and passionately to anyone who will listen.
Look, no investor wants to be left out of the next Apple or Facebook. Narrow-minded VCs will probably turn you down, but at least they won't waste much of your time. VCs with the flexibility and capital to invest in far-reaching ideas just may bite.
Give it your best shot and see if you can break the ice. After all, today's crazy idea could very well be tomorrow's hot new industry.
