Getting Second Date with a Venture Capitalist
Winning an approval for a venture capital funding is like going on a first date where the goal is to have a second date. By giving the capitalist the right impression, they will surely become more interested in your proposed business.
Who says that venture capital funding has completely disappeared from the picture? This news is definitely an exaggeration of the real status of this private equity capital.
The truth is that during the technology bubble, a big deal of investments have been made that brought this financing vehicle up to its normal level. This has become possible for the fact that most business owners have found it an opportunity to expand during this time when they can have great use of this kind of financial advantage.
In order to prosper in this kind of venture, you need not to be only charming but you also need to have the potential of being the next big businessman. In short you have to possess the right qualities of someone who is eligible for this opportunity. First, you have to gain a comprehensive knowledge of the market that you are targeting. Another thing is to have a winning plan that will detail all the effective actions to gain the target market. Skill in holding share is also an important factor to consider. Last but not the least, it is required that you and your team must have the capability to execute the plan. You have to furnish enough proof for this. In addition, “returns” is very significant and this means that the product or services that you are going to offer must have an intrinsic value. A clear value proposition is required in this aspect.
Showing the value created is like having a first date with a venture capitalist. In presenting it, you have to give the attainable goals and not hoping for things that are impossible to attain. In having a date, the primary goal is not to get married but instead, the goal is to have a second date. In order to achieve this goal, you have to make a good impression on your date. There are five important aspects that can truly help in making a good impression in venture capital funding.
The first aspect to consider which is considered critical is on how close the product or services to be fully-developed. Proof for this may include letters of intent to purchase, or you can also provide a list of potential customers. The second aspect, which is also considered critical, focuses on the experience of the management team. Another critical aspect, the third aspect, is the proof for the product or process ownership. Trade secrets in this aspect are more important than holding patents. Fourth, a snapshot of dilutions and valuations for 36 months in the form of a financing plan can give additional impression though it is not considered a critical factor. Another thing that will somewhat give you additional credit is a preview of what the investor can get that you have to provide during the process of due diligence.
Following these advices can give you better chances of having a second date with the venture capitalist. Good luck on your efforts.
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