If you want to start your own business, but are unable to procure a bank loan because you do not have any collateral or guarantor, or for any other reason, then you could approach a venture capitalist.
Venture capitalists will invest in your business if they see future potential in your small business and will take a share of your profit margin.
Develop a Professional Business Plan
Venture capitalists will not invest money if you just stand in front of them and narrate your plan. You will have to provide them with business facts and figures. You will have to give them a detailed plan as to your product details, how you plan to attract customers, your projected sales and projected margins. Your targets should be physically achievable and should not simply be written from your imagination.
You can write your business plan with help from software packages available on the Internet. Or better still – get it done by a professional.
Conduct Thorough Market Research
As a small business owner, you have to know who your customers are and where they will come from. If you fail to do the proper market research, your business plan will only end up in the trash. Simply assuming that there is a market for your products can be a costly error in judgment on your part — you need cold, hard facts.
Give the results in writing to your proposed financers.
Present and Follow Up
Prepare 7 to 10 copies and submit them to different venture capitalists. Call them up and ask them if they have any questions regarding your report. Show them that you are serious about your proposed business. Then wait for their response.
Be aware that venture capitalists can take over your business if they have a major share of it. But if you are successful in running your business and you have a good venture capitalist backing you up, then not only will you obtain the financing you need, but your business will be a success, making your investors very happy.