Preparation, Positioning, and Perseverance.
Prepare yourself and your company by developing a strong
business model and a solid business plan.
Position your search for capital by researching what kind of
capital is appropriate for your company, what venture capital
firms have the investment parameters that match your company,
by stage, amount of capital, industry, and geographic location.
And finally persevere, don't give up.
Preparation:
Develop a clear, concise, realistic business plan that gets the
reader excited about the opportunity your company presents.
The plan must not only cover what you are going to do but how
you are going to do it.
Hone your market research and analysis skills. Systematically
gather information on your competitors, so that you can make a
credible case for why your product/service offering will be better.
Let other experienced business people read and critique your
plan, testing it for clarity and reasonableness. Never send a first
draft to the venture capitalists. Proofread it a number of times.
Put together a strong, experienced management team, with
people who have been successful in the past.
Positioning:
Research the investment criteria of the venture capitalists to
ensure that what you offer is what they are looking for.
Use every method you can think of to reach potential investors.
See if you can find someone that knows the VC and can make
a personal referral.
But don't rely simply on referrals, contact the venture capitalists
directly yourself. Our survey showed that direct contact by the
entrepreneur was mentioned by 30% of venture capitalists as the
way they most commonly found the deals they invested in.
Perseverance:
Keep trying, don't give up.
Continually widen your network of contacts to give you more
avenues of approach to investors.
(And don't forget to put your name and phone number in the
business plan, so the investor can call you!)
Dee Power is co-author with Brian E. Hill of
"Inside Secrets To Venture Capital" published by
John Wiley & Sons May 2001
available in bookstores nationwide, barnesand noble.com,
borders.com and amazon.com
