Venture Capital Firms

Do you know what is the hardest thing to do when you are after venture capital? I’ll tell you right now. It’s finding a way to convince the investment firm that your business has great potential and can bring massive benefits without revealing all the secrets of your trade and without giving them the full business plan until you have at least a verbal agreement, which in most cases is not enough.

In many cases if your company is successful and worthy of raising venture capital you have proprietary Intellectual Property (IP) or proprietary ideas. What you need to accomplish is to convince the investors to sign a non-disclosure agreements (NDA) which is critical. This is the hard part because most investors will not want to sign one.

If a NDA is not signed, you can use a few techniques to protect yourself. First of all you must not discuss the confidential aspects of your IP in the communication documents aimed to the investor like the teaser email or the Business Plan. Focus more on the benefits and applications of the IP, how will your customer benefit from it and how it can help you create a market.

When things get serious and VCs issue a term sheet, during the due diligence or even before, they will ask to review the proprietary information so they can make a final decision about investing in your company. This is a good time to let them do it. They spend thousand of dollars in the due diligence process and that means that they are really interested and that your idea really caught their attention. Venture capital firms do not make a living out of stealing ideas but it is maybe safer that at the beginning of your relationship, during the first presentation or so to keep the confidential, key material to yourself. It shouldn’t be hard to do as in the beginning the investors will only want to quickly evaluate your venture and see if it has any potential.

You should make a plan for yourself and reveal confidential information in stages. Each time the investment firm makes a step forward for a future partnership you can reveal more about how you run your business and the proprietary rights.

It is a tough world out there and you should always be careful with whom you talk about what you do. It is a lot of trouble to find a good investment firm you can trust and that can take a lot of time. Fortunately, there are shortcuts into this long dreaded process.

Some risks are always there when you are presenting valuable information about your company but maybe nothing will happen if you find the right investors. Just click here and choose one of the reliable investors that our team of professional checked for you. Better safe than sorry, I always say.

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