How to Get Venture Capital Funding
A major hurdle for many people wanting to develop a brilliant idea into something of commercial value is lack of financing. Some need seed funding, while others have already started but lack the additional capital to fully launch their brainchild to the market.
These people may be independent scientists who have discovered a new technology or university students who have developed a prototype of some machine.
Aside from not having enough balance in the bank, they lack the standing to obtain a loan or get credit.
Do You Need Venture Capital Funding?
If you find yourself in the same predicament, your hope will be in finding an angel investor or a venture capitalist that would be willing to invest not only money but also expertise in helping you get started or take off. The range of the amount of investment that angel investors make is wide – from a few thousands to millions. On the other hand, venture capitalists start investing in much larger amount, at least $1 million, they say. Venture capitalists are able to come up with such a large amount by pooling investment commitments from individual and institutional members. If your funding need is this big, you better seek a venture capitalist rather than an angel investor.
Finding Venture Capital Funding
Half of getting venture capital funding is finding a venture capitalist to invest in your idea. The other half is preparing how to win them over. Venture capitalists make a risky decision everytime they agree to fund a project. Logically, they’d bank only on those they foresee as having a high chance of success, usually in the field of software, biotechnology, medicine and healthcare. To convince a venture capitalist to provide you with financing, you must:
- have a dedicated management
- a strong business plan
- scope of high return
- heavily back your tool or product that can create a buzz in the niche
How to look for a venture capitalist firm? Finding one is more than looking their names and contact numbers in the directory. You must find one whose interest is in line with the project you want to develop. Not only that, you should also discover at what stage of a company’s development does your target typically invests in. Find a good match. Visit The National Venture Capital Association for a list of venture capital firms. To help you in your search, enlist the help of a venture capital consultant.
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