Home > Startup > Startup Financing > Raising Venture Capital


Steve Harrick

Guide to Raising Venture Capital

Managing the first meeting to make sure you get a second


Highly
Useful
7.0
out of 10

Add Your Comments
 
 
Email Guide to Raising Venture Capital to a friend
Save the Guide to Raising Venture Capital to My Work.com Favorites
Print the Guide to Raising Venture Capital
link to this page
Save to del.icio.us
digg it!


You’re working hard to build your business -- hiring talented employees, securing satisfied customers and effectively managing operations. It is now time to bring in a financial partner. With some presentation planning and the correct approach, you can increase the odds of attracting a firm that will help you to recognize opportunity and navigate obstacles -- while providing your business with the investment capital needed to achieve your goals.

Attracting the right Venture Firm can make a significant difference in the probability (and magnitude) of your success. In order to do so, it is essential that your first meeting leads to a second, and eventually, to an investment.

There are four fundamental issues to keep in mind when approaching a Venture Capitalist for the first time:

1. Manage your time effectively
2. Construct a presentation with a logical sequence
3. Engage in an open dialogue about the business
4. Establish a concrete plan for follow-up

Action Steps
The best contacts and resources to help you get it done

Establish how much time is allocated to your meeting and manage your presentation accordingly


Ask this up front, and recognize that you will have to budget for questions along the way and at the end of the presentation. Moving your presentation along and managing your time will demonstrate that you are in control of the meeting. It is usually a good sign when a Venture Capitalist asks you and your team to stay longer.

I recommend: Microsoft for advice on creating better presentations.

Your presentation should be unique to your business, while following a logical sequence


I have found that the following presentation order works well: (1) • Summary Slide (2) • Management Team Background (3) • Market Opportunity (4) • Product / Service Offering (5) • Financials and Deal Mechanics. You can increase or decrease the number of slides in your presentation depending on which parts of the presentation you would like to emphasize.

I recommend: organizing your slides to reflect an Executive Summary of your business plan. To learn more about business plans, go to Business Plan Pro from Palo Alto Software or BusinessPlans.com.  The  Start up Venture Toolbox also has some helpful information.

Approach the meeting as a formal conversation


The Venture Firm you are meeting with is exploring whether or not the business is compelling but also whether or not you and your team would be good people to work with. The most efficient way to do this, in a limited time, is for the Venture Capitalist to ask you open and direct questions. Do not get defensive. These questions are an attempt to understand how you think through problems and recognize opportunity. Engage your audience, be forthright and establish a foundation for trust between you and your potential investor.

I recommend: Browsing some common questions with investors.

Ask about the plan for follow-up


Don’t leave the meeting without knowing what comes next. Ask the VCs about their process, if they require additional materials from you, and when you should expect to hear from them. Then hold them to it. A highly interested investor will keep the interaction going, requesting materials, speaking with customers and scheduling follow-up meetings. Radio silence is as good as a ‘no’.

I recommend: Entrepreneur for learning more about the process.

Tips & Tactics
Helpful advice for making the most of this Guide

  • The purpose of a first meeting is to lead to a second. Sophisticated investors rarely make a decision on the spot.
  • Look at the meeting as an opportunity to attract an additional partner in your business. Think about what attributes you desire most in an investment firm / Board member.
  • Keep your presentation concise and logical in its progression. A well organized business overview will make it easier for you to manage your time.
  • Encourage questions and interaction. Get the potential investors curious and then solidify the follow-up with actionable next steps.

The official source of Raising Venture Capital is
the Development Stage Venture Capital page at Business.com


Featured Vendors

The Invention and New Product Exposition
Inpex®, the Invention & New Product Expo, has over 1,000 inventions to license, manufacture & market! Attend or Exhibit. Pittsburgh, PA, June 2010.
www.INPEX.com

Venture Capital Database
Find venture capital firms, technology startups and venture capital transactions. Free Trial.
www.VentureDeal.com

Find an Investor
Need startup money? $500 million available only for innovative startups.
FundingUniverse.com

Venture Capital Resource
Offers a venture capital directory on CD-ROM. Includes contact data for all active US venture capital firms in 90 industries.
www.capitalvector.com

Sign up for the What Works for Business weekly e-newsletter!
 Related Resources from Business.com Back to top 
 Recommended Solution Providers Back to top 

Provides reviews of various types of presentation software for pricing and usefulness.

Consultants who specialize in designing professional PowerPoint presentations.

Features a software package to help create a business plan. Also provides hundreds of free examples for users to find help.

Includes sample business plans, industry profiles, and compatibility with QuickBooks.

Provides online services and tools to entrepreneurs, investors and service providers.

Specializes in funding small businesses.

Tips and services to enhance your investment pitch.


 Best Sites to Learn MoreBack to top 

Emphasizes the importance of venture capital to the U.S. economy and supports entrepreneurial activity and innovation.

Collection of articles dedicated to the process of venture capital.

Mentions common questions that were discussed during VC meetings.

Lists 20 questions that may come up when talking to a venture capitalist.

Offers tips for creating better presentations.

Provides comprehensive information on the venture capital industry.

Guide for advice on raising start-up capital.

National Venture Capital Association.


  Best Blogs and Forums Back to top 

Broad discourse of venture capital topics.

Covers all aspects and areas of PowerPoint, presentation design, content, creation, and public speaking.

Focuses on ways to use software for effective presentations.

Chat room discusses funding opportunities for business owners.

Forum about venture capital, entrepreneurship, and all other issues related to starting and growing a business.

Devoted to posts on how to present your company.


  CommentsBack to top 

Loading Comments...


Add Your Comments


Email Guide to Raising Venture Capital to a friend
Save the Guide to Raising Venture Capital to My Work.com Favorites
Print the Guide to Raising Venture Capital
link to this page
Save to del.icio.us
digg it!


Is any content on this page inappropriate? To let us know, please click here.



© 2010 Work.com, Inc. All Rights Reserved. Work.com is a property of Business.com.
Help | About Us | Site Map | Terms of Use | Privacy Policy | Community Policy | Taskonomy | Advertise | Contact Us | Local Business Directory | Work.com Feed