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Venture Capital - Getting Ready

Written by: Evan Carmichael

Article Overview: If you've ever wished you could sit down alone with an experienced venture capitalist and have them give you an inside track on exactly what they look for when funding projects, and how to give yourself an edge, this will be an important website for you.

Venture Capital - Getting Ready

If you've ever wished you could sit down alone with an experienced venture capitalist and have them give you an inside track on exactly what they look for when funding projects, and how to give yourself an edge, this will be an important website for you.

The insider knowledge in the pages to come are from Matthew Gaasenbeek, Robert DeJong, and Michael Dinnick who have over 100 combined years of venture capital experience. They have secured money for advertising agencies, manufacturing companies, financial services firms, retailers, bio-pharmaceutical businesses, research and development organizations, wealth management companies… even air charter firms! They have worked in almost every industry raising both debt and equity for companies. They have also taken companies public and have served as international financial advisors for governments. Now you can get their strategies working for you.

Venture Capital - Stages Of Financing

The first stage of financing is to raise money from personal savings, credit cards, friends, and family. It is sometimes known as “golf-course preferred” when you ask people to invest in your company after meeting socially or playing a round of golf together.

You need to build significant critical mass before you can attract an outside angel or venture capital investor and eventually to secure an initial public offering (IPO). The developing of the necessary critical mass can take years of hard work.

There are some companies called incubators that will take an early stage business and guide them through the entire process of building an enterprise but will take a large percentage of your company in return.

Venture Capital - What To Consider Before Raising Venture Capital

Venture capitalists want to see more than an idea. They want to see that you have a client list, a finished product that is beyond the beta stage, a clearly defined need in the market place, and sales. They want to see that you have significant traction in place.

Although during some periods, venture capitalists were willing to take a long-term perspective; this is a very rare phenomenon. Most venture capitalists want to see a return in a very short period of time.

An essential characteristic of a successful entrepreneur is the ability to raise capital.

Develop a relationship with your banker before you need the money. The final decision of whether to give you a loan or not rests with the loan officer. If she knows you and understands your business, your chances of receiving the money increase dramatically.

Venture Capital - The Types Of Businesses Venture Capitalists Prefer

Venture capitalists will not invest in anything illegal or immoral. Anything that involves laundered, dirty, or offshore money will not attract venture capital investment.

Otherwise, a venture capitalist will look at any business providing that it meets their criteria of providing a return on investment, having good management, supplying a sound business plan, and demonstrating a developed product or service with revenues.

Some venture capitalists as a matter of policy will restrict themselves to investing in a specific industry. It is the role of the intermediary to know which firms would be willing to invest in your company.

Venture Capital - How Much Money To Ask For

There is no such thing as an overcapitalized small company.

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Article Tags: air charter, beta stage, capital venture, critical mass, dejong, development organizations, incubators, initial public offering, initial public offering ipo, insider knowledge, manufacturing companies, personal savings, pharmaceutical businesses, raising venture capital, stage business, venture capital experience, venture capital investor, venture capitalist, venture capitalists, wealth management companies



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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: Make sure you're a corporation - [quote="Evan"]Here's another suggestion from my experience - make sure your company is set up as a corporation. If you're going for angel or VC financing, they will become equity owners in your business. For this to happen you need to have a corporation and a shareholder's agreement. I've seen a lot of deals fall apart because the business was not ready with their corporation. They were sole proprietorships and had not given any consideration to a shareholder's agreement. It makes you look like unprofessional and can seriously detract from your capital raising initiatives.[/quote] I agree that one major step in being "capital ready" is to create a separate entity. In the US that traditionally means forming a Coproration, although the LLC approach is becoming a viable option. However, just being a Corporation (or LLC) doesn't mean you are Capital Ready.
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? .


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