Last year, Canadian venture capital firms poured $7.86 billion into 592 deals. Big number, small catch: only a sliver of that money reached early-stage founders.
So how do you make sure you’re one of them? It’s part numbers and part tech, sure. But sometimes the difference between a yes and a no comes down to the intangibles—the stuff you’ll never see on a term sheet but somehow decides everything. Here’s a closer look at what those are.
What venture firms really look for in startups
Pitching investors can feel like guessing the password to a very exclusive club. Luckily, the members have dropped a few hints.
- The founder + team: Investors don’t bet on ideas, they bet on people. Why? Because according to VCs like Boris Wertz of Version One Ventures, “99% of the magic is created by founders and their teams.” Translation: they’re reading your body language as much as your balance sheet. They want to see grit, adaptability, and chemistry strong enough to handle the chaos of building a business. Takeaway: Don’t just introduce your team, show the “why us” factor. Pull in stories of real scrapes, pivots, or tough calls you survived together. That’s what makes investors believe you can pull it off again.
- Timing: Speed is the one real advantage startups have over big companies that move slowly. As Dragon’s Den investor Michele Romanow explained, the obsession with polish is what kills momentum: “In school, we’re taught that 95% is better than 90%, which is better than 80%. But as an entrepreneur, it’s about executing 3x faster at 65% accuracy.” Takeaway: Launch what you have, get it in front of customers, and tweak as you go. Every week you hold back is another week for a competitor to sneak ahead.
- Product and traction: People and timing matter, but investors still want hard evidence that the idea works in the real world. Ted Mocarski, senior partner at Novacap’s Digital Infrastructure Fund, put it clearly: venture firms care about “being able to point to real transactions—not just hypotheticals.”. Takeaway: Bring the receipts, literally. Show revenue milestones (your first $100K ARR), pilot projects that turned into paying contracts, or churn rates that prove people stick around. These are the numbers that shut down debate in the partner room.
- Exit strategy: Venture firms have one endgame: get their money back and then some. That could mean an IPO, a strategic acquisition, or even a secondary sale down the road. The exact route matters less than the payoff. Takeaway. Map the finish line for them. Point to realistic acquirers in your sector, public comps that set a valuation range, or Canadian precedents that prove exits at scale are possible.
How venture firms put startups to the test
An impressive pitch is one thing. But decisions are rarely made on the spot. Even the deals you see on Dragon’s Den go through weeks of scrutiny before any money changes hands. At venture capital firms, that scrutiny happens in the partner room.
The lead partner (the one who liked your pitch) circulates a memo on the team, market, traction, risks, and deal terms. Then comes the group chat energy: debate, skepticism, and hopefully someone willing to go to bat for you.
- Fund math check: The first question is always whether your company can make a big enough return for the fund. For example, a $250M fund aiming for 15–20% ownership at seed or Series A needs to believe its slice could be worth $50M or more one day. If that math doesn’t work, nothing else does.
- Price and ownership: Is the valuation fair, and does the cap table leave space for future rounds? Partners also think ahead: how much more cash will they need to pour in just to hold their stake?
- Traction: Growth alone doesn’t cut it. They’ll ask: Are customers sticking around? Is the cost of winning them back reasonable compared to what they spend? Are your margins strong enough to scale? Slow and sticky often beats fast and leaky.
- Team and founder dynamics: Research keeps showing the same thing: team quality is the biggest driver of investor decisions. They’ll zero in on how you handle pressure, whether you can pivot when things go sideways, and if your leadership feels steady. A crack in that confidence can outweigh even the best numbers on your slide deck.
- Risk: Every firm carries baggage from past losses. If your model reminds someone of a deal that went badly, they’ll say so. Others may argue why this time is different. The real debate is less about whether risk exists (because it always does) and more about whether the potential reward makes that risk worth it.
- Yes vs. no. Rarely does everyone agree. Most deals move forward because one or two partners push hard enough to get the rest on board. But a single “no,” especially if it’s tied to a red flag like messy contracts or a bad backchannel reference, can shut things down instantly.
Founder takeaways: how to win over venture firms
- Build relationships early. Don’t wait until you’re desperate for cash. A quick update email every few months keeps you on investors’ radar, so when you do raise, you’re not a total stranger.
- Keep your receipts handy. A tidy data room (financials, contracts, market research) makes diligence faster and shows you’re already thinking like a venture-scale company.
- Tailor your pitch. Every firm has its own stage, sector, and appetite for risk. If you’re pitching a growth-stage fund with a pre-revenue deck, expect the fastest “no” of your life.
- Play the speed card. As Michele Romanow likes to say, “Entrepreneurs don’t need an MBA; they need a GSD—a Get Sh*t Done Degree.” Prove you move faster than the pack, whether that’s locking down pilots, shipping updates, or getting real feedback from customers.
- Think beyond Canada. Local traction matters, but most investors want to see how the story scales abroad. Make the upside look big enough to match their ambition.
Giving venture firms a story they can bet on
Your pitch is the trailer. The partner meeting is the full movie. And your champion? They’re the friend dragging everyone to the theater. Give them a story worth hyping, and you’re one step closer to a blockbuster deal.
Need help sharpening your story or making the right connections? At BHive, we help founders do both. Learn more about our programs.