How to Attract Venture Capitalists in Business

The days of throwing money at 18-year-old dotcom visionaries is not completely over, but Investors have become more speculative about putting their money behind an idea. If you have an idea, then you must also be able to market yourself and your company to attract those big investment dollars.

Difficulty: Easy

Instructions

1. Venture capitalists are looking for someone who is seasoned in business.
   
   Not to say that they won't invest in a 18-year-old wonder, but that 18-year-old needs to have a more seasoned, veteran on his team. Investors are looking for someone who has been around the block, weathered a few storms. It is not just about the idea that you bring to the table, its also about the experience of being in that field or an entrepreneur in general.

2. Investors want to know about your customer base.
   
   What will compel customers to buy your product? What problem does this solve in their lives? What will make them tell their friends about this product, is it unique? And why will they buy it at this price? Are your customers so in love with your product that they're asking if they can invest in your company.
   
   Be prepared to answer all these questions. Investors spend a lot of time focusing on customers, and therefore you should too.

3. The Entrepreneurial Spirit is also important.
   
   It can be broken down into several personality characteristics: passion, tenacity,flexibility, knowledge, teamwork, and coachability.
   
   Investors want to know that you have passion about what you're doing. Do you focus on this passion morning, noon, and night? Does this product or venture excite you? Do you display and transfer this passion when you're discussing your idea.
   
   Are you tenacious? Will you follow through with your idea through thick and thin? Are you strong enough, and tenacious enough, to see your idea through fruition. That is part of the reason why investors often look for seasoned entrepreneurs, because starting and growing a business can be incredibly frustrating. You will hit some many bumps and snags in the road. You must be stubbornly tenacious.
   
   At the same time, you must be flexible. You must be able to find a new approach, which may require you to change your course. Maybe you need to alter your product to bring down it's production price. Maybe you need to bring down your sales price. Whatever it is, investors need to know that you can be flexible and listen to their concerns and heed their advice.
   
   It is equally important to be knowledgeable. Not only must you know about the product your selling, you must know about all other like products, or products within that industry. Who are your competitors? Who are your customers? Know everything about each. What drives them? What they drive (there is a difference between the buying power of customers who drive Rolls Royces versus Subarus. Not only is it economic, but they have different interests.)? How much buying power do they have? How competitive or saturated is your industry? Be able to provide details about every potential competitor?
   
   They also want to know how much you know about your own product. Know it, in and out, so that you can answer any and all questions.
   
   You must be able to work as a team. Even entrepreneurs don't work alone. No one can do everything. So you must be able to build a well-defined team, and take and give instructions in order to accomplish your goals. A good team player can bend but not be stepped on, is friendly but focused, and is complementary but firm.
   
   Lastly, you must be coachable. You must be able to be given instructions and taught. Even though you may be seasoned in your industry, you can't know everything. And when investors are considering giving you money, they want to know that thei

4. Investors want to seize on the right opportunity at the right time.
   
   Investors are interested in ideas that change our behavior and the world. As Yahoo! and Google did for the internet, and MySpace did for social networking, venture capitalists want that next big thing. But they don't want to bring it to the market before its time. If you invest in something that the world is not ready for, not only will you lose your investment but you will have to watch someone else take advantage of the foundation that you built. Timing is everything.

5. How solid is your business model.
   
   Investors want to see a business plan that considers the least profitable scenario. It is unrealistic to assume that your business will be automatically profitable. What if you only sold to 1% of your predicted customer base, will you still make a profit? How much profit will you make if your production costs were higher then you predict? Build your business model considering all unexpected costs and profit scenarios. If it still adds up on paper, then you are more likely to attract investors.