Securing venture capital is not the easiest thing in the world for the average business to do. Literally hundreds of business pitches are received each year for venture capital, and it is very easy to become lost in the sea of businesses that are interested. How do you manage to secure venture capital in this sea of investment seekers?
The first thing that you should do is understand that venture capitalists are not interested in ill formed or incomplete business proposals. The first thing they will look at is whether or not you have done the proper research and development of the idea. The least you could do is provide a clear and concise business proposal if you expect a venture capitalist to buy in on the opportunity.
Another common problem is that businesses may not fit into the venture capitalist’s plans. Know what the focus is for each venture capitalist before you apply or submit any request. If they work only with environmental companies, it does not make sense to propose them a company that is not eco-friendly, for example. Know who you are proposing to do business with. Pratt’s Guide will give you all the details on the majority of venture capitalist focuses out there. Invest in a copy, and you will get your money back a hundred times over.
Surround yourself with competent and proven managers, such as investing in a chemical m&a firm. You do not want to lose out on venture capital funding because one of your key managers is a convicted felon. Know who you are working with, and make sure they are strong, competent, and socially responsible people. These are the people that you will do business with, and you will need to have the best to get venture capital funding of any kind.
Meet the venture capitalist in some way before you offer up a business proposal. The venture capitalist will be much more inclined to speak with and deal with someone they have met over someone that they have never even heard of. If you can not reach the venture capitalist personally, then get to know someone in their circle. You can then be introduced, and make your move afterwards.
Be very persistent, but not at the expense of losing professionalism. Be passionate about your potential business, but also be willing to listen to what the venture capitalist has to say. Sometimes minor changes can be the difference between acquiring the venture capital or not, and you want to make sure you hear those clues when they are sent. Open ears hear, while an open mouth does not.
Make sure you follow up with the venture capitalist with a thank you letter. This letter should be clearly genuine, and reiterate your hope for business. These tips will give you a much better chance of securing venture capital if you implement them. Patience is the key to success here, as venture capitalists are very careful about where they place their interests and their money.