What Venture Capitalists Want
Venture capitalists receive vast numbers of business plans and proposals from companies that want funding. If you want to stand out from the rest, you have to accomplish two things: Interest venture capitalists enough to meet with you, and set yourself apart from the competition when you do.
Here are some tips for increasing the chance that a venture capitalist will pay attention to your proposal:
- Gather information about different venture capitalists.
- Prepare a topnotch business plan.
- Find a reputable third party (such as your lawyer, colleague, or accountant) to deliver your business plan or make an introduction.
When you meet with the venture capitalist, you should be prepared to communicate the following
- You have a clear understanding of your business.
- You have a clear understanding of the hurdles facing your business.
- You have a vision for the company's growth.
- You have a sound company strategy and business plan.
- Your management team has drive and ambition.
- Your management team has relevant experience.
- Your target market is substantial and growing rapidly.
- Your business has a proprietary or differentiated product.
- Your business can realize significant gross profit margins in the long term.
- Your business has the potential to be a "home run" investment.
Click here to view a sample of an Investment Analysis Summary Form — the type of form that venture capitalists use when deciding whether to invest in a company. Before you meet the venture capitalist, fill out this form and think about whether you would invest in your company.
