How to Win Venture Capital? Two Strategic Approaches for Startups

Raising Venture Capital is one of the most challenging yet crucial phases for any entrepreneur. Founders have two distinct paths to choose from, each offering unique dynamics and appeal to investors. In this special episode of TICE Funding Index, we explore both approaches to securing capital and how mastering them can lead to startup success.

1. Let the Numbers Do the Talking

One proven approach is to bootstrap your startup and let the revenue speak for itself. Picture this: growing your business to $10 million in Annual Recurring Revenue (ARR) within two to three years, all while maintaining high gross margins. At this stage, venture capitalists (VCs) are no longer a challenge to overcome but a coveted opportunity. Your business model has shown validation and sustainability, and VCs will come knocking, eager to invest in your thriving venture.

In this approach, the numbers are your strongest asset. There’s little need for investor jargon or over-the-top pitches. The figures—revenue, margins, growth—speak volumes. Your success in a competitive market proves that your business is already on solid footing.

However, achieving such growth requires discipline, relentless execution, and the ability to build efficiently with minimal external capital. While this approach gives founders a high level of control, it's important to acknowledge that bootstrapping to such heights is rare without the right combination of product-market fit and operational excellence.

2. Master the Venture Capital Game

Alternatively, you can take an entirely different but equally viable route: mastering the art of raising venture capital by crafting a compelling narrative around your idea. In this scenario, the focus is less on the numbers and more on storytelling, vision, and strategic positioning.

For instance, AI startups are one of the hottest sectors globally, with VCs pouring billions into early-stage ventures. If you have a groundbreaking idea in AI, the potential market is enormous, and investors are eager to get in early on the next big disruption. The key here is not necessarily strong revenue numbers from the outset, but rather crafting a vision of what your company could become. Convincing VCs that you are the right person to turn your idea into a billion-dollar enterprise within a few years is critical.

This approach requires deep market understanding, competitive analysis, and fluency in key performance indicators (KPIs) that resonate with investors. Founders who can clearly articulate their value proposition and the long-term potential of their business often secure funding, even if profitability is yet to be achieved.

The Perfect Combination: Numbers and Vision

For those rare founders who manage to combine both approaches—solid business traction and a compelling vision—the rewards are even greater. This hybrid method enables founders to raise capital on their terms, gaining access to funding while retaining control over their business. These founders possess the dual skills of building a profitable company while captivating investors with a bold narrative.

Best Approach to Raise Funds

Both approaches to raising venture capital—building a profitable business or mastering the art of storytelling—are valuable and can lead to success. While the odds may favor founders who excel at the second approach, those who achieve success by bootstrapping to significant revenue have the ultimate leverage. And for founders who can blend both, the sky’s the limit.

Disclaimer: This article draws inspiration from various LinkedIn posts by Pushkar Singh, Co-Founder of Tremis Capital. Pushkar is renowned for his workshops that guide founders in the process of raising capital.