If you are a business and are attempting to raise capital to support operations or to expand obtaining investments from a venture capital investor may be a good place to raise capital. Venture capital tends to have certain advantage over other capital investors that can aide your business significantly. To start with, venture capital investors tend to be more sophisticated and will work with management to help put the right people in place to expand your business significantly. This is particularly helpful if your business does not have sophisticated members of management in place to help run a growing organization. Many businesses start small with a founder who may have a good idea and is able to successfully launch a business. Growing the business beyond this initial stage is sometimes challenging for them as they may not have the connections of financial sophistication to do so in an effective and efficient way. A venture capital investor often has both experience and connections and can help to guide your business on the right path towards prosperity.
Furthermore, many venture capital investors are willing to wait until a business turns around operations and a negative quarter or fiscal year will not necessarily drive them out of the investment. Venture capital tends to be more patient than other forms of capital and more willing to work with management in developing a business model that is successful over a longer period of time.
You don’t have to raise tons of venture capital to be your own boss. At the 99% Conference, seasoned investor Fred Wilson outlines 10 ways to make a living doing what you love.
While venture capital is often desirable for a company, it is sometimes difficult to obtain. There are many places where you can attempt to seek out venture capital. There are trade shows that venture capital investors’ visit and search for investment opportunities. Search for any trade shows and ask to see an attendee list to search for any investors that may be attending. You can research different venture capital firms that specialize in the industry that you are in. Many funds are designed to invest in a specific industry, such as technology start-up funds and you may be able to present to them your company.
Once you have a venture capital investor’s attention, it is important to provide them with information regarding your company. Audited financial statements are a good place to start. If you do not have audited financial statements, reviewed financial statements are also useful as well. While these can be a helpful tool to show them that you are being honest regarding your financial position, they do not demonstrate where your business is going. Have a presentation detailing your business, a budget and projection, any competitive advantages that your company has, and any other information that may help them make a decision regarding whether or not to invest in your company.
Interested to learn more venture capital techniques? Check out real case study from China Sonangol