Venture Capital Firms

Developing a List of Venture Capital Companies

The current economic climate means two things when you’re seeking funding for your company: you need to identify all your funding options; and you need to explore every option that’s viable. Some people in the know claim that knowing where to seek funding is every bit as important as how well your pitch your company. Developing a
list of several venture capital companies is one of the essential steps in helping your business grow.

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You can purchase such a list, or you can create one yourself. Several websites (National Venture Capital Association and Growthink University are two examples) sell lists of venture capital firms online. But you can create your own list of venture capital companies by simply exerting a little effort.

The Internet will give you a substantial amount of help. Internet search engines will find the names of almost every venture capital company operating in the U.S. Once you start finding them, you’ll need to narrow your choices so the list you create is effective.

First, determine which VC companies are located fairly close to your business – within 200 or so miles would be best. The next step involves finding out in which industry sectors these venture capital companies prefer investing; most of them specialize in certain fields. By seeking funding from firms that are familiar with your industry, you’ll boost your likelihood of success.

You should also find out which stage(s) of business the firms prefer to fund. Identify the stage your company falls within (concept-only, pre-revenue, startup, profitable, and so forth) and then look for venture capital companies that often invest in companies at the same developmental stage.

You now have a list of venture capital companies that should be a potentially good fit for funding your company. Your next step involves researching the partners in each of these VC firms. Read company websites and any other material you can find to identify the firms’ partners and learn about their backgrounds. A company with a partner who has experience in your industry or a background that’s similar to yours might be a good match.

You should also research the active portfolio of companies that each venture capital firm funds. If your company shares common ground with some of those companies, the venture capital firms will be more inclined to provide funding. And, if your company’s business complements one of their other investments, that increases your
chances too.

You should also look into the size of a VC firm’s fund and how much it typically invests. If it has a tremendous fund and usually makes substantial investments, the firm might not be interested in funding a smaller company. Conversely, if you’re seeking C- or D- funding and need a large investment, a small venture capital firm might not be the right fit.

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In summary, finding potential investors is the first step in finding funding. Perform research to identify the VC firms that are most likely to fund your company. You probably won’t find the ideal fit, but you’ll increase your likelihood of success by doing some up-front work. Here’s to your success!

Peter

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