When Should Your Startup Seek to Raise Capital? Grays Peak Capital LP’s Scott Stevens Discusses


Photo by Austin Distel on Unsplash

Venture capital is the holy grail for any startup. When venture capital comes in, it almost always signals a change in fortunes for the startup. The startup can typically grow its team, accelerate its marketing efforts, and grow faster. But, if you have a startup, when should you seek to raise capital? The answer to this, says Scott Stevens, a partner at Grays Peak Capital LP, lies in first understanding the definition of a startup. A startup, he says, is a rapidly growing company going after a large market with a game-changing innovative solution. A hotdog stand or web design agency do not fall under this category. If your startup meets this criterion, here are four checkboxes Grays Peak Capital LP states you need to tick before going after venture capital.

1. Innovation Concept

The first thing investors want to know is what you are taking to market, says Scott Stevens. This idea goes by many names: elevator pitch, value proposition, unique selling point, etc. They all mean one thing: is your idea unique and compelling enough to get a sizeable number of people excited enough to buy from you.

This pitch determines whether your startup has a chance of raising funds or not. Keep in mind; however, that any startup with a killer idea can meet failure in the marketplace due to various unforeseen factors that may result in mitigating through a positional pivot. As such, the best startups have a running list of great ideas that they can pursue next in case the current idea fails, which is also something investors may seek.

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About Scott Stevens

Scott has over twenty years of global investment experience in finance, technology, consulting and M&A. Prior to Grays Peak, Scott was a Portfolio Manager at some of the leading equity long/short hedge funds spanning a successful sixteen year career in public market investing.

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