You have the perfect idea, it’s time to get financed and bring your project to the next level. Being an entrepreneur is all about talent, perseverance and funding. You can chose to knock at a bank’s door or send your application to an Angel Investor. Here is what you need to know to be ready when meeting a venture capitalist.Finding a venture capitalist willing to take the risk to invest in your project will require you to get prepared. The process might be long and venture capitalists only go with very few entrepreneurs. In order to be one of them, you will need to prepare yourself and learn how to sell your project. As Marketing expert and ex-Venture Capitalist Tomer Tzach explains ‘You should prepare for a process that can take six or nine months or even a year, depending on the market conditions. You need to prepare for people with little knowledge of your technology or market who are comfortable telling you that there is no market for your technology.’
Brace Yourself And Have All The Right Ammunition
Yes, prepare yourself as you don’t want to miss any opportunity to get financed. This simply means that you will need to know everything about your project even though it has been launched. A book which can be very helpful in this process is, Venture Capital Book: An Entrepreneur Guide To Obtaining Capital To Start A Business (…) by David Gladstone[1]. The author demystifies interactions between investors and entrepreneurs, giving keys to present one self, and sell one’s ideas, go through the deal process and understand the jargon. Since you will need to present your project professionally and uniquely enough to catch the investor’s interest, making sure that you have your business plan, projections and references in hand is essential. Don’t go for mediocrity or your chance to get financed will drop drastically.
Yes, prepare yourself as you don’t want to miss any opportunity to get financed. This simply means that you will need to know everything about your project even though it has been launched. A book which can be very helpful in this process is, Venture Capital Book: An Entrepreneur Guide To Obtaining Capital To Start A Business (…) by David Gladstone[1]. The author demystifies interactions between investors and entrepreneurs, giving keys to present one self, and sell one’s ideas, go through the deal process and understand the jargon. Since you will need to present your project professionally and uniquely enough to catch the investor’s interest, making sure that you have your business plan, projections and references in hand is essential. Don’t go for mediocrity or your chance to get financed will drop drastically.
Pick Carefully, You Are Building A Trust Relationship
Tomer Tzach also advises to carefully plan how to target which VCs you will contact. In short, make some research prior to contacting them and don’t pick randomly. Surely, there will be venture capitalists closer to your town, your field of expertise or who have already invested in similar projects. This will be translated in them being more in synch with what you want and clearly better able to help you get started. Rank the VCs you have chosen according to their ability to finance you. Tzach insists: ‘I’d recommend beginning the VC outreach process with the lower ranked VCs who are also less likely to invest in your company, so that you can get some practice under your belt, and if you make a mistake, it won’t be critical.’ You can find VCs on the Internet:
Tomer Tzach also advises to carefully plan how to target which VCs you will contact. In short, make some research prior to contacting them and don’t pick randomly. Surely, there will be venture capitalists closer to your town, your field of expertise or who have already invested in similar projects. This will be translated in them being more in synch with what you want and clearly better able to help you get started. Rank the VCs you have chosen according to their ability to finance you. Tzach insists: ‘I’d recommend beginning the VC outreach process with the lower ranked VCs who are also less likely to invest in your company, so that you can get some practice under your belt, and if you make a mistake, it won’t be critical.’ You can find VCs on the Internet:
Check also Business Universities with Entrepreneurship Programs, as they will be a great source of angel investors, Business Incubators and local Chambers of Commerce.
It Doesn’t Stop With Money
Once you will have been financed, you will be ‘stuck’ with an investor checking that he/she gets returns on the money invested. The relationship doesn’t stop once you get the money. You are building a long-term relationship with a potential partner so make sure that you have delimited the boundaries and set the rules. Both sides of the relationship need to agree and walk hand in hand for the business to be a success. Also, make sure that you know when you will need to take the reins and go on your own. And be clear about it.
Once you will have been financed, you will be ‘stuck’ with an investor checking that he/she gets returns on the money invested. The relationship doesn’t stop once you get the money. You are building a long-term relationship with a potential partner so make sure that you have delimited the boundaries and set the rules. Both sides of the relationship need to agree and walk hand in hand for the business to be a success. Also, make sure that you know when you will need to take the reins and go on your own. And be clear about it.
A Very Small Family
VCs are part of a small family where they all know each other. This means that if you screw the relationship up, it may end in everybody knowing about it within the industry. So communicate with your VC at all times, make sure that you support and create a healthy relationship with the person who has been willing to take the risk with you.
VCs are part of a small family where they all know each other. This means that if you screw the relationship up, it may end in everybody knowing about it within the industry. So communicate with your VC at all times, make sure that you support and create a healthy relationship with the person who has been willing to take the risk with you.
Angel investors are out there, no matter the international crisis or the decrease in general investment. Get your gear ready and go get your business the finance it deserves. It’s up to you to be successful.
Tomer Tzach on Venture Beat http://venturebeat.com/2011/03/24/smarter-entrepreneur-vcs/
Venture Capital Book: An Entrepreneur Guide To Obtaining Capital To Start A Business (…) by David Gladstone http://www.amazon.com/Venture-Capital-Handbook-New-Revised/dp/0139415017
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