How to Get Venture Capital Funding for Business Startup

Money: you need it, the venture capitalists have it. How do you get what you need?

Money: you need it, the venture capitalists have it. How do you get what you need?

Because of the nature of my business – doing product development for primarily large companies – I have been very fortunate and have not needed to search for funding. I have, however, learned a bit about the process during the last few years teaching Entrepreneurship to MBA students.

The best advice I can give to anyone looking to raise venture capital (VC) money for their business startup or to grow their business is to get to know the company or companies you will be sending your business plan to. And don’t think that you must be an Internet company. Venture capital firms have money for other kinds of new services and products, too.

You can find listings of these firms on the Internet. Also look in your state’s listings to see if there is a venture capital group with money available to expand business in your own state.

Before you submit your plan, you will need to do some homework. First you need to know if the company funds the kinds of products or services you offer and if they fund at the level you currently need i.e. early seed or first stage.

Most lenders have Web sites. Go to it and read their criteria for submission of business plans. Or request the guidelines be mailed to you if you don’t have use of the Internet. Then if the directions say, “Do not e-mail us your business plan,” don’t e-mail them your business plan.

You may think that the person on the other end will be forced to read it because it’s in his mailbox and he or she will probably fall in love with your idea and send you lots of money. The opposite is more likely. It will probably go straight to the trash. I can pretty much guarantee that if you don’t follow the rules exactly your plan will not be read by anyone at the company.

You must believe in what you are trying to do and get the VC’s to believe in it too through both your business plan and your presentation to them.

Have a well-written business plan. Tell your business story clearly and concisely. No one wants to plow through a 60-page plan. Write for the busy reader!

Try to establish a contact at the company, one you can send your plan to and then keep in touch with regarding progress.

And then don’t be surprised that even if you do follow the rules exactly, have the type of product the company usually funds, a contact at the company, and have a clean, concise business plan, you still do not get funded. The window of opportunity at each company is different and sometimes very short.

Don’t give up. Try different companies. Rewrite your plan. Ask your contact for advice. There are several sites on the Internet where you can find help writing business plans. Resubmit to the same company at a different time. Use your contact at the company to guide you. Keep trying.

Article – Copyright 2000 Stanley I. Mason. Syndicated by ParadigmTSA

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