How to Get Venture Capitalist Money
Venture capitalist money helps new businesses to grow and succeed. Unfortunately, many first-time business owners have no idea how to obtain funding. It's not a black art, but it does require skill and strategy. You'll need to practice your networking, sales and presentation skills. You'll also need to dedicate lots of time to tracking down money, in addition to running your already operational business. The effort is worth it. An infusion of venture capital helps your business to expand and prosper.
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Instructions
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Ensure that your business is actually ready for venture capitalist money. You're more likely to secure venture capital if your business is already up-and-running. A fully operational business is ready for venture capital, while a business in the planning stages probably isn't.
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Determine whether or not there is enough venture capital in your geographical area. If not, you'll need to travel to find money. While a lot can be done via long-distance communication, a venture capitalist will want to meet you before handing over any cash.
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Contact everyone you know and ask for investments. Ask each person you speak with for the names and contact information of three people who might want to invest in a business. While most people won't give you money, you'll eventually run into some big players in the venture capital world. It's all about networking.
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Perfect your sales pitch before you make any appointments. Aim to convince potential investors that their risks will pay off big time. Venture capitalists want to see potential returns of up to 10 times their investment. State exactly how you will achieve these returns.
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Set as many appointments as possible with potential investors in your newly forged network. Convince venture capitalists that they can't afford not to invest in your company. Deliver your sales pitch persuasively and show that your business creates value both for clients and investors.
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Obtain legal counsel familiar with venture capital funding deals and draw up a funding contract. Ensure that the contract terms are fair for both you and the investor.
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Work tirelessly on improving your business. Put your newly obtained capital to good use. Prove that your business is a good investment, since you may want to raise more money in the future.
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Tips & Warnings
Treat everyone you meet as a potential investor. Be kind, courteous and polite to absolutely everyone. You never know who will be able to help you out.
Don't base your sales pitch solely on a business plan. Venture capitalists want to know that your business is more than just a set of numbers.
References
Resources
- Photo Credit heap of the american money image by Maksim Pasko from Fotolia.com
