Venture Capital, Is it Possible For You?

Maybe you are giving serious consideration to looking at what is available in the way of venture capital. Quite possibly  you have friends who have  followed this method of funding their business. So you feel, if they can do this successfully, why can I not do the same?

Once you get started with your search you will soon discover that first and foremost you have to raise the capital, this is especially true with venture capital. A few tips that should help you along with raising venture capital;

First,  you will have to get yourself to thinking the same way these investor firms think.  Well they are there for one thing and one thing only,  to make a profit. Their goal is the same as yours, make a profit.

The main differences between you and these companies,  they have spent most of their time over the past two or three years studying which types of business have the best potential of making some money within a couple of years. Thus the primary reason that a lot of firms cater to technology as well as biotechnology type businesses. These  businesses have a much higher potential of  making money  quicker than a lot of others.

Most of the time you will find that many of these firms operate within a given type of businesses that they consider to be their specialty. Should this be the case, then you will find it difficult to get them to vary from what is considered as their specialty.  

You will need to get a list of the companies operating in your area or state and then determine the specialty of each of them in order to proceed with a business plan. If you are seeking money to open up a chicken farm, will be hard to get a firm to work with you especially if they do not get involved within any type farming operations.

Once your investigation is complete as to the type firms available in your state, you can then work up a good eye catching proposal and present it to them along with your request for funds. You should know in advance what the firm will invest their money in.  Then proceed to give them what they want. If your business proposal is not in line with their  specialty then you had better be sure it is impressive enough to catch their eye.

Now is the time to proceed to the next step; 

The preparation of your proposal. Since most of these firms get all kinds of proposals on a regular basis. It is important for your proposal to be brief but it must be complete.

If you have done your homework ,  then your proposal will show them that you are on the ball and know the area you plan on working with.  You should know the market you hope to penetrate.  You should also know your competition .  Their weaknesses and strengths should be known,  as well as the strategies they exercise.

You need to get some professional help with creating and making a draft of your proposal.  While it may increase your costs,  your chances of being approved will increase greatly if you seek expert help with your proposal. You will find this to be very important specially when you have no business background.

Quite possibly you know your business very well and you have also completed thorough research. However,  if it has not been translated into a clear, reasonable proposal, there is a good chance it will not fly. That is where the expert help comes in. Also make sure you have no errors in typo or grammar, while at the same time making sure that the figures are accurate.

Once you have given them your proposal and have their attention, it is time to get your management team up and ready. You must remember also that with a venture capital firm you are going to lose a certain degree of control over the company. Most of these firms will  put some people in to sit on the board and be a part of your management team. It is therefore imperative that your management team be able to handle the pressure from the investment firm.

If you would like to expand your present business or possibly go into a new one then the venture capital funding is a good way to go as long as you understand the  options you will have and lose by going with a venture capital firm. You should read a lot as well as study your business plan,  then make a determination as to whether or not venture capital is applicable.

If you think that this is the way to go, then go ahead with it. Just be sure that you take all precautionary measures and know all the strategies to your business plan.