Evan Carmichael Articles

Venture Capital - Getting Ready - Click To Read Article
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 - Preparing The Plan - Click To Read Article
Make it so that your mother or grandmother can understand it. Entrepreneurs too often fill their business plans with of acronyms, tech terms, and buzz words. Intermediaries can usually tell after the first paragraph how difficult it will be to raise capital for your business. Condense what you do and what you want into a statement that you can make very promptly in seconds or minutes. If you cannot communicate quickly, you will lose the investor’s interest.

Sample Non Disclosure Agreement - Click To Read Article
An intermediary should always sign a confidentiality or non-disclosure agreement (NDA). It is a 1 to 5 page document that acknowledges you have sensitive information that if released could harm your business and it should not be shared. Venture capitalists, however, will not normally sign a confidentiality agreement. They see so many companies in the same industry that they cannot sign one agreement and risk not being able to invest in other potential good deals.

Sample Term Sheet - Click To Read Article
If the venture capitalists are interested, they will very quickly come up with a draft term sheet for you which gives an overview of the conditions under which they would make an investment in your company. (see next page for a sample term sheet).

Meeting With The Venture Capitalist - Click To Read Article
Meetings with venture capitalists are also referred to as “the dog & pony show.” It provides the first opportunity for investors to meet the management of your company face to face and assess the people behind the business. You could have a brilliant business plan backed by poor management. This will only become apparent to the venture capitalist in the meeting.

How To Valuate Your Business - Click To Read Article
The venture capitalists will usually look at your projected, or pro forma, earnings 3 to 5 years from the point of their investment. From there they will deduct a 30% annual return that they expect to receive and will subtract a further percentage for the fact that you are a private and therefore non liquid company. This is known as the pre-money valuation.

Contacting The Venture Capitalist - Click To Read Article
Venture capitalists are in business to make money. They have to have the ability to select companies that will make more money than their rivals. There are 2 types of companies. The first is a lifestyle business. These types of companies are centered around the lifestyle of the entrepreneurs. The owners will use the business to drive expensive cars and purchase big houses. These are not businesses that attract venture capital.


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