Venture Capital - Getting Ready

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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