Following up on the level headed advice that Chuck Lacy gave prospective social entrepreneurs, I came across a recent post on one of VC blogs that is equally relevant. Here are some excerpts, you can see the entire article at
… We all know that coming up with market sizing and revenue forecasts for a startup is as accurate as the weatherman predicting the weather. That being said, VCs want to understand the logic behind the numbers as much as the numbers themselves.
… accumulating users and worrying about revenue years from now is yesterday’s news. Unless you have tremendous scale when you show up at a VC’s door, then don’t bank on ad revenue as your only revenue source.
…So if you want to get funded, you better have a clear answer on how you will make money and either be implementing that model today or in the short-term. What VCs are looking for is a revenue model today that makes sense – this can include premium subscription revenue, analytic revenue, and even lead generation revenue, but don’t ptich massive scale and advertising as your go-to revenue souce 24 months from funding. You will be shown the door quite quickly.
Regardless what your business focus it – this makes sense to consider as you go about building a business model.