Over the years I have been continually surprised by how stupid otherwise smart and educated people can be, particularly when it comes to seeking venture capital. But usually their ignorance comes down to one thing: they haven´t done the homework.
When starting out on the fund raising process it can´t be reiterated enough: know your venture capital firm!! Do the research! Hire an intern, if you must, to research funds and create a spreadsheet. "Use the "ole noggin," as my dear dad would say!
Most venture firms worth their salt post their "criteria" for making an investment on their Web site so that entrepreneurs can make informed decisions about whether it´s worth sending a business plan.
The list of criteria, sometimes hailed as "investment philosophy" or "investment strategy," is usually broken down by specific industry, investment size, stage of the company and geography. Lest you think-that´s easy: software, medical device, bio-tech. Think again. Some firms which make investments in software companies may only invest in "financial software" or software to do with the security industry. Others might be media or gaming centric.
Sometimes venture firms have raised multiple funds focusing on different (but often related) sectors. For instance, CMGI´s @Ventures has a fund which focuses primarily on investments in clean energy technologies, including alternative energy, energy efficiency and water purification and management.
While you might consider your idea "revolutionary," something which might convince firms to invest outside their stated area, be aware. Many funds are mandated by the terms of their agreements with their investors to invest in, and stick with, a certain sector. If the venture firm went to investors with the idea to focus on investments in the wireless space and raised the money based on that, then they must invest in companies developing technology for the wireless market. Similarly if a firm raised money with the intention of investing in nanotech technologies then it must be invested in nanotech.
Much of the money which is invested into venture firms comes from government pension funds, such as CalPERS, the California Public Employee´s Retirement System (In fact, CalPERS is the granddaddy of pension funds and holds quite a bit of sway with the venture community). In such, there are multiple levels of checks and balances to ensure funds sticks to theirs mandates.
Another step you must take before sending a resume is to review the firm´s portfolio companies (again, elementary, but can´t be said enough!). One thing you don´t want to do is send your business plan to a firm which has backed your competitor.
Some pages where you can view the criteria/philosophy of a handful of venture firms:
West Palm Beach, Florida & Zurich, Switzerland
(see criteria under "Contact Us" button)
Draper Fisher Jurvestson
Menlo Park, California
(see Draper´s affiliated funds throughout the country)
New Enterprise Associates (NEA)
Menlo Park, California
New York, New York