August 15, 2012
There are a great many venture capital firms, but not every one of them is the right fit for your business. You need to keep in mind that a venture capital firm isnâ€™t an impersonal business entity. Itâ€™s a partnership made up of people with their own individual histories, skill sets and experiences and when you receive funding from a VC firm, one or more of these partners will usually take a seat on your Board of Directors. When you choose a venture capital firm, youâ€™re also choosing someone to sit on your board. As such, youâ€™ll want to pick a partner who has experience relevant to your industry and who will be a good fit with the rest of your board.
Venture capital firms generally make information about their partners publicly available. You should be able to find a short biography as well as information about their education, industry experience and any recognitions or awards that theyâ€™ve received over the course of their careers easily enough, usually from the VC firmâ€™s website. If you can choose a partner at a venture capital firm whose experience and skills are a good match for your company, you can gain a valuable ally in the effort to grow your business as well as capital funding for your company.
Once youâ€™ve decided on a partner that youâ€™d like to have on your Board of Directors, the next step is to get in touch with them. Remember that VC firms get a great many business plans sent to them unsolicited and they simply donâ€™t have time to look at them all. Because of this, youâ€™re better off getting an introduction or a letter of recommendation from someone who has dealt with the firm before or who has an acquaintance who is a partner at a VC firm. Accountants, entrepreneurs who have been funded by the firm before, lawyers and other professionals can all help you to get your business plan read. Sometimes, all you need to do to get an introduction is to ask.
Finding a partner to work with is the first step in the process â€“ but you then need to get their notice and to sell them on the merits of your business as an investment. Once youâ€™ve convinced one partner, youâ€™ve won half the battle and youâ€™ll have less of a challenge closing the deal.
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