It can be very frustrating when a person has a great idea, but not the financial resources to put it into action. Start-up capital is needed to turn an idea into a thriving business. Venture capitalists can be a great way for some entrepreneurs to put their idea into action and grow it into a prosperous venture. However, venture capitalists don’t simply give out money.
Venture capitalist firms provide funding for start-up businesses so they can get share in the profits or ownership in the company. If a business is likely to become highly lucrative over time, the owner might be able to get venture funding. So, an entrepreneur must be ready to prove that his idea is viable in order to obtain funding from a venture capitalist.
There are certain steps that need to be taken when seeking venture capital. Even the most experienced entrepreneurs with the best of business plans need to follow the right steps to attract venture capitalists, not just to obtain the venture funding but also to reach a good deal.
Venture capitalists are very busy people and deal with hundreds of potential clients. It is important to contact them in a professional manner. They can be contacted through a lawyer or an accountant, or an executive of a company that has worked with the venture capitalist. Getting personally introduced by any of these professionals is a good way getting the attention of the venture capitalists.
A business plan is a requirement when looking for venture capital funding. Venture capitalist firms receive a large number of requests from businesspeople each year. It is essential to have an attractive and informative business plan in order to be able to convince them that the business idea or project been presented is worth investing in.
Once the initial contact has been made with the right venture capital firm, the person seeking funding should send them an executive summary. This is a document that outlines the important aspects of the business.
How to Write a Powerful Executive Summary
After making contact with an interested venture capital firm, it’s time to negotiate a good deal. Venture capitalists are businesspeople and they want to make as much money as they can. It is advisable to get a lawyer before getting into a negotiation with a venture capital firm. A good lawyer can provide proper guidance to ensure that a good deal is reached. A proficient lawyer will make sure that his client does not lose full control of his business.
Explore further strategic venture capital investment from David Hand Crescent Point Asia or read more about Crescent Point Venture Capital stories, the leading emerging markets investment management and financial advisory firm primarily targeting in the Asia-Pacific and Middle East regions.