Top 7 Things VCs Look for in Startups

The startup realm is buzzing with challenges. There are several pivotal decisions en route to success. One such critical phase is the decision to seek funding from venture capitalists. Once made, the challenge is to get funded with the key question on every founder’s mind being, “What will make us attractive to the right VC?”.

Let’s explore that thought. The Indian venture capital scene in 2023 showcases some striking shifts. Startup funding in India took a nosedive, plummeting by a significant 71.5% to $4.9 billion between January and August 2023, a steep fall from the robust $17.1 billion seen in the prior year.

Yet, despite this downturn, India maintains its global standing among the top five markets for VC funding activity, accounting for 3.1% of the total funding deals announced from January to August 2023.

Looking closer at specific funding transactions in India from January to August 2023 reveals interesting details. Notable deals include PhysicsWallah securing a hefty $250 million, Zepto raising $200 million, PhonePe bagging $200 million, Veritas Finance landing $146 million, and KreditBee closing an impressive $120 million round. That’s, of course, apart from a bunch of enthusiastic and innovative startups securing smaller rounds despite not being the darlings of the headlines.

So, what exactly attracts VC interest in startups? Here, we unravel the top 7 sought-after qualities that VCs prioritize, shedding light on the pivotal factors steering pitches in the fiercely competitive world of venture capital.