Getting Venture Capital for Your Online Idea
Wiliam has developed a number of websites from the ground up. But before Wiliam got involved, the companies had to seek start up capital from Venture Capitalists to get their ideas off the ground. If you are interested in pursing this option, here are five steps you can take.
- Make Good Connections
Professional contacts are important for any business but when you are seeking venture capital, they are critical. Many professionals in private equity businesses such as accountants, investment bankers and lawyers have close relationships with venture capital firms. These individuals can provide essential in-roads to venture capitalists. If you do not have contacts in private equity, attend local professional networking events in your specific industry. Other small business may be able to provide contacts as well.
- Do Your Research
Not all venture capital firms are the same. Each will specialize in various industries and geographies as well as the business models they are willing to consider. It will be well worth your effort to determine whether a firm fits your business up front. If not, you may waste valuable time and energy towards venture capitalists that would never consider your business in the first place.
- Review Your Business Plan
Do you realize that most venture capital firms read hundreds of business plans each week? Even with a strong referral, weak business plans won’t progress any further in the process. Even a fairly well written plan in likely to be rejected. In industries with stiff competition, only the most dynamic and strategic plans will receive consideration.
- Demonstrate Profitability
The tough economic climate has an effect on the availability of venture capital funds. Now more than ever, venture capital firms are looking for a clear path to profitability. You will need to define your plan to become profitable as quickly as possible if you want to secure funds.
- Plan for Your Presentation
Planning adequately for your presentation with a venture capital firm may seem like common sense. But are you prepared for the numerous smaller presentations that precede it? As you work your way through your network you will most likely share your plan with other professionals in the private equity market. Since you are depending on these individuals for referrals, these presentations are as critical to your success as a meeting with a venture capital firm.
