You will increase the attractiveness of your startup to investors if you can show a competitive barrier that will help you defend your market position.
Investors worry that your business may be overrun by well-funded copycats at the first sign of success. Protectable intellectual property, network effects, exclusive partner agreements, or products or services that are hard to replicate can all be effective barriers to entry that protect you from fast-acting competitors.
In The Startup Game: Inside the Partnership between Venture Capitalists and Entrepreneurs, William H. Draper, one of the most respected and well-known venture capitalists in Silicon Valley, tells the story of his family’s three generations of involvement in venture capital. This insider’s look at the relationship between investors and entrepreneurs is interspersed with lessons and advice for would-be entrepreneurs.
