22 Jan 4 Tips to Secure Venture Capital
Let’s face it, even with that million-dollar business idea proper funding is quite literally the golden ticket to bring ideas into full fledged execution. Unfortunately if you’re an avid Shark Tank follower, attracting and securing the right venture capitalist takes a bit more formality than it appears on the reality show. According to MoneyTree, venture capitalist invested $17.5 billion in 1,189 deals within the second quarter of 2015. With that said, it seems as though entrepreneurs and investors are jointly agreeing that big growth requires big capital.
We understand that securing funds is a daunting process in itself. With our multi-industry expertise, we can however, provide you with a few helpful hints to succeed in gaining funding.
- Innovation with High Barriers to Entry
Investing in startups comes with a large risk investors are unwilling to assume without a strong sense of confidence. This confidence is partly derived from an innovative business idea with high barriers to entry. As the founder of Exhilarator noted, “my personal gauge when evaluating a startup is, would the target customer wait in line for five minutes to get access to the product/ service, or would they abandon? If it took five minutes to download an app or to access a site, would the customer persist?”
The intensity of competition within a particular market is just one indicator on how attractive a venture may be to a potential investor or financier. Entrepreneurs that strive to launch even a groundbreaking product in a market with high barriers to entry oftentimes place themselves at a disadvantage that is difficult to overcome.
- Complementary Team
Create a strong team of partners, both advisors and experts internally and externally with complementary skills and proven track records. Identify from the early stages what each member’s personal strengths and weaknesses are. Together, we can devote a generous amount of time recognizing where gaps need to be filled. Aside from industry knowledge and the proposal, our investors are going to look at all the ingredients of a healthy team; energy, enthusiasm, interactions,.
- Start Studying
Start studying, and keep studying. Before you meet with an investor, be sure to learn your business and industry inside and out. Investors and financiers will surely do their part in testing every angle of your business proposition to observe proficiency and resilience. Again, investors are looking for ways to verify a return on investment. Be sure to flaunt your knowledge and engagement by providing facts and figures. Are you lacking either financial and operational expertise? Many people are in your boat! Classes, podcasts, and entrepreneurial finance books are all just a few ways to start the ongoing process of learning the lingo.
- Pitching the Idea
The big moment(s)! First off, start as early as possible, engaging in both small and large audiences. Practice the smaller pitches with those who have past experience in raising capital. When it comes time for the bigger moments, remember that transparency is key. Investors and financiers are professionals at reading between the lines of financial statements and business plans. Demonstrate your strengths while addressing any blemishes that the business needs to overcome through aligning itself with a strategic partner. This again will establish honesty while simultaneously demonstrating a commitment to improvement. Know when to stop talking. Time yourself and be able to convey your vision, major success points in under a minute.