October 22, 2012
There are many different new companies that are seeking venture capital. In these tough times, it is hard for small businesses to get started on the right foot. For those that are not familiar with what venture capital is, here is a brief explanation. There are a number of successful entrepreneurs out there that are willing to help others achieve success as they have. They are willing to invest money into starting businesses, even if it is risky. Most of these people in turn want a piece of that success as well. The big difference between seeking a loan and getting venture capital is that a loan you have to pay back, those people willing to put up venture capital want a piece of the profits.
There are several ways to find venture capital. One of them is through the Small Business Administration. They can provide a list of potential investors. There are also several websites that provide lists of people and companies that are willing to put up venture capital for small businesses. Whichever choice you decide to go with, here are some tips that can help you find the right people.
One of the most important tips is do your research. Before contacting a company, look into that company and find out what it is about, and see if it will match the kind of product or service you are looking to start. For an example, if you are seeking monies to start a restaurant, you want to find those that have been in the restaurant business, not a company that works in the circuit board industry. The closer to the kind of business you want to start, the more sympathetic they may be.
Another important part of getting venture capital is presentation. Your investors are looking at taking part of the profits, not being paid back like a loan. They want to make sure your company is going to be profitable enough to give them a good return on investment. Dressing nice, having a complete proposal, knowing where the capital is going, and how much of a profit is going to be made within five years is important. Also, some venture capital investors are also looking at how you are going to have an impact on the community. Is your business going to be employing people in the local area? Is it going to have a positive impact, bringing in more people to the area, expanding or helping out the neighborhood?
Venture capital investors are going to be part owners in your company, so they will have a lot of input. You have to be open to their suggestions, and be willing to make changes so they feel satisfied that their investment is going to turn a profit. Take advantage of their experience, their knowledge, and trust their judgment. All too often people trying to start a small business are head strong, and don’t take the advice of others, and the downfall is that investors are not willing to offer capital to get these companies on their feet.