Unlocking the Secrets to Venture Capital

Unlocking the Secrets to Venture Capital
By Dee Power copyright May 2001
Preparation, Positioning, and Perseverance.

Prepare yourself and your company by developing a strong business model and a solid business plan.

Position your search for capital by researching what kind of capital is appropriate for your company, what venture capital firms have the investment parameters that match your company, by stage, amount of capital, industry, and geographic location.

And finally persevere, don't give up.

Preparation:
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Develop a clear, concise, realistic business plan that gets the reader excited about the opportunity your company presents. The plan must not only cover what you are going to do but how you are going to do it.

Hone your market research and analysis skills. Systematically gather information on your competitors, so that you can make a credible case for why your product/service offering will be better.

Let other experienced business people read and critique your plan, testing it for clarity and reasonableness. Never send a first draft to the venture capitalists. Proofread it a number of times.

Put together a strong, experienced management team, with people who have been successful in the past.

Positioning:
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Research the investment criteria of the venture capitalists to ensure that what you offer is what they are looking for.

Use every method you can think of to reach potential investors.

See if you can find someone that knows the VC and can make a personal referral.

But don't rely simply on referrals, contact the venture capitalists directly yourself. Our survey showed that direct contact by the entrepreneur was mentioned by 30% of venture capitalists as the way they most commonly found the deals they invested in.

Perseverance:
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Keep trying, don't give up.

Continually widen your network of contacts to give you more avenues of approach to investors.

(And don't forget to put your name and phone number in the business plan, so the investor can call you!)

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Dee Power is co-author with Brian E. Hill of "Inside Secrets To Venture Capital" published by John Wiley & Sons May 2001 available in bookstores nationwide, barnesand noble.com, borders.com and amazon.com
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