Tweet

Venture Capital

Written by: William Cunningham

Article Overview: We've included some data on the best venture capital sites for women and minority investors.

Venture Capital

Ahhh, Venture Capital, the quaint and entirely American notion that if you send some stranger a business plan, they will send you a million dollars. We wouldn't bet on it if you are a minority-owned company.

And don't laugh too hard, sisters. According to one source, "women-owned businesses receive less than 4% of venture capital money."

To help you along, we've included some data on the best venture capital sites for women and minority investors. We're gonna be frank here. We hope you don't mind. We must warn you at the outset: Most, but not all, venture capital firms targeted to minorities and, to a lesser extent, women, are ineffective. This includes most of the incorrectly named MESBIC's (Minority Enterprise Small Business Investment Companies) and the SBA.

Part of the problem may be the quality of the business plans these Venture Capital guys are seeing. Having been on the web since 1995, we've seen every kind of business plan, from those that caused us to refuse to accept any more messages from the sender's email address to a few brilliant ideas really worthy of further consideration. All we can say is, we're willing to help, but DO A LITTLE HOMEWORK, FIRST. PULEEZE....

Basics

Venture Capital - Venture Capital (VC) firms invest in start up and early stage firms. Venture capital investments usually start at $250,000 and are mainly in "businesses that exhibit extremely high growth potential." If they invest, these firms expect to earn a significant return on their investment. For example, one venture capital firm, in 1996, invested $2 million dollars in Lycos, an internet search engine. That investment was worth $427 million at the start of 1999.

Another VC firm told a small minority company we know that "Unless you foresee revenues in the ballpark of $20 million in year 3 for the product this would not be a venture target. Thank you so much for considering BLANK Venture Partners." If your venture does not have a chance of meeting these investment return and revenue targets, reconsider seeking venture capital.

Other considerations: Most venture capital firms cannot correctly evaluate investment opportunities in minority markets. They don't have the personnel to do so, (if you know what I mean.) Still, if you feel your business will, in fact, generate "revenues in the ballpark of $20 million in year 3 for the product," give them a shot.

But, be careful. Before you send them anything to any venture capital firm, get a signed confidentiality agreement. Or, send a stripped down version of your business plan, without all of the secrets. Many VC firms simply collect good business plans and ideas, which they then develop. We feel this will be especially problematic for minority firms.

Prospects for Minority and women-owned firms seeking funding: Poor. A VC firm may see 1,000 business plans in a year, and only fund 10. You do the math. Your chances with these firms are, in essence, zero. (See: Anti-Venture Capital)

Still, we think the following are among the Best VC Site for minorities and women:

Fund Isabella focuses on early stage, women-led companies or those operating in the women's market.

Vcapital.com

Their quick response to our survey indicates a real interest in this sector. Following are the answers they gave:

1. How long have you been on the internet?

Since January 4, 1999

2. Do any sections on your site target or seek to serve women and/or minorities?

Yes, we have Venture Capital Firms in our Network that only invest in Minority-Owned Businesses and we have segmented them accordingly at http://www.vcapital.com/Network/4b_prefs.asp. Also, we are affiliating with many minority-focused organization such as TiE - The Indus Entrepreneurs.

3. If you are a lending institution (a bank, thrift, or payday loan company), do you have data that shows the number of on-line loans made to women and/or minorities in 1998 or so far in 1999? Could you send that data us?

We are not a lending institution. We have Network Members that invest, but generally do not lend.

4. Please tell us about your founders, owners, employees, and partners. Are any of your founders women or members of a minority group?

Four of our 13 employees are women and we have no other minorities that work for our firm at the moment. We are hiring quickly and these numbers will change dramatically by year end. As stated above, several of our partners (Network Member venture capital firms) are minority focused.

We like these answers. Give them a shot. And let us know what happens.

Other Venture Capital Sites:

Ascend Venture Group, LLC, New York, NY

Ibero American Investors Corporation (IAIC)

Provender Capital Group, LLC

Related Articles
  Venture Capital & Recessions
  Phrase du Jour: Venture Tourist
  “Tips For Entrepreneurs In Selecting A Venture Capitalist”
  The Venture Capital Capital Calamity Thing
  How to Pickup a Venture Capitalist

Article Tags:



Related Forum Posts
Del Castienne - International Business and Project Brokers - In addition to the above, Del Castienne is an international brokerage firm specializing in various entrepreneural services. Del Castienne is more than just a brokerage, as we facilitate Private International Venture Capital for Business and Projects from Commodity Speculation Transactions, MBO, MBI, M&A, Bridging Finance, Patents, Branding, JV, Corporate Advisory Services, Business Plan Development, etc.. Del Castienne is linked to 1200 private international Venture Capital consortiums and Funding Syndicates with a funding capacity of $ 115 billion and 5000 international Investment Bankers and Business & Project Brokers. This in itself should provide you with a gateway to the best source of funding in the world. Through Del Castienne any entrepreneur can have up to a potential success rate of 25% (conditions apply) with absolutely no up front costs. Del Castienne charges a maximum of 5% commission which is far below the international standard of 10% - 12% on project value. If you are tired of running back and forth with countless dissappointments, please give us an opportunity to assist you. Our minimum Venture Capital amount is $1 million and we a Commitment Letter can be provided with in 30 days after formalities are in place and your information was received.
New Small Business Topic - Hello everyone, I'm on the lookout for new topics to add to my site. We just launched a Franchising section and are planning Human Resources section. Do you have any thoughts for a new section? Here's a list of what we currently have: Angel Investors Branding Bank Loans Business Coaching Business Plan Franchises (New) Insurance Legal Marketing Public Relations Sales Small Biz Loans Venture Capital
Re: need a capitalist to hear me out - If you have solid business plan, there are thousands of Angel Investors and Venture Capitalists that will fund your project. Google "Venture Capitalist" and you will get tons of investors who are ready to fund your project
I have an invention, now what do I do? - I am sure that a lot of this is covered in different topics, but as a new inventor, I have some questions. Bit of info for you, so you know where we are. 1. I have a working prototype. 2. This is a web based piece of software. 3. The software has to do with social media. (Although it is not a social site) 4. It is a tool for social media users. Cross platform, meaning, Facebook, twitter, linkedin etc.. all the major ones. 5. We have active users. This is a tested solution with real users. We did a market test and had 40-50 users signup within 1 day. We are currently not accepting new users until the beta is completed. 6. We are ready to start looking for Venture Capital or Investors. Where should we start? Patent? First to market? NDA's? Anyone have experience in this realm? What should we do first? .
Re: I have an invention, now what do I do? - [quote="JohnHenning":11mzzvqc]I am sure that a lot of this is covered in different topics, but as a new inventor, I have some questions. Bit of info for you, so you know where we are. 1. I have a working prototype. 2. This is a web based piece of software. 3. The software has to do with social media. (Although it is not a social site) 4. It is a tool for social media users. Cross platform, meaning, Facebook, twitter, linkedin etc.. all the major ones. 5. We have active users. This is a tested solution with real users. We did a market test and had 40-50 users signup within 1 day. We are currently not accepting new users until the beta is completed. 6. We are ready to start looking for Venture Capital or Investors. Where should we start? Patent? First to market? NDA's? Anyone have experience in this realm? What should we do first? .[/quote:11mzzvqc] Hi John I think your first step would be to patent your invention. You have tested it with real users and know that it works. I have not had actual experience with this as I have never invented anything, but if you just go through this section of the forum (inventors corner) you will find a lot of very useful advice. Hope this helps MichelleJ


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

SEO – Link Building Secrets

Tips for the Novice Traveler

Basic Operating Question (BOQ) for Empowerment

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.