July 14, 2010
Do you think you know everything about raising venture capital?
You are probably far from it. Watch this free video that will teach you the new, effective methods for doing it right.
In order to get funding you need to understand what venture capital firms are after and how they make money.
VCs will provide capital in the form of equity to the firms, which can prove and show specific signs of constant growth and present realistic expectations of high profits in a reasonable amount of time (usually 5 to 7 years).
Venture capital firms do not invest their own money; instead, the funds are gathered from pension funds, insurance companies, wealthy individuals or corporations. This situation makes them particularly keen on choosing the company in which they will invest. The investment will not be based on liking the management team or the entrepreneur although this is an important factor, but most of all on the ability of the firm to reach certain milestones.
The amount of money they invest is over $1 million and they invest only in companies with high market potential, maybe even more than $100 million. Not all the companies they invest in will be successful and they are aware of that. Only one third of them will actually break even and even less will be a huge success, but the profit rates for those particular hits will be so high that the overall result of all the investments will be a positive one.
Venture capital firms will look for returns of 10 times or even 100 times of their initial investment and it is important to be able to sketch a realistic plan of how you are going to reach that goal and how the money they invest will be used.
The investments will be made in the sectors the venture capitalists are familiar with and in which they can actively help the company to follow their plans or even exceed expectations. Each venture capital firm is different in that it will have different criteria of investment. Scale, speed and liquidity potential are some of the most important factors an investment firm will take into consideration. Ideally, your venture has already gained a sufficient market share and your product or service is very convincing not only for the investor but also for your customers for which it solves a specific and painful need.
The investment are based on the advantage one specific firm has over its competitors as it is very rare the situation where a venture does not have any competitors. This is a statement that can be very dangerous or even decisive if argued during a meeting with your possible investors.
Every presentation material you create from now on must follow these guidelines and state what the investors want to hear. It is not only about the business plan, but most importantly about the teaser email you will send to get their attention and executive summary aimed to get them interested in your venture.
Watch this free presentation to find out how to get venture capitalists interested in your venture. Do it now, as it will be online for only a limited amount of time.
All the best,
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