Who Are Venture Capitalists?
Author: Jene Pedder
Venture Capitalists are wealthy private investors who can help
finance your business either it being a business in trouble
financially or a new business venture.
There is usually a five year lock up on Venture Capital
investments, this means the Venture Capitalist or the business
they are helping to fund cannot get out of the deal until the
five years is up, sometimes this may be longer depending on the
agreed business plan. They also charge management fees and
incentive fees as well as taking a good sized share of your
business. Unlike Business Angels, Venture Capitalists like to
have a director or management role within the company to discuss
the running of the business as well as keeping a close eye on
their investment making sure the business succeeds. But there
are a few Venture Capitalists who like to give the company the
finance they require then take a back seat and let the company
who know the trade etc. and let them run the business on a day
to day basis.
Finding the right Venture Capitalist for you may be a scary
prospect but there many Venture Capitalist firms now available
which have Venture Capitalists waiting to invest in a new and
upcoming business with good prospects. Making a proposition to a
Venture Capitalist can be a scary thought, you need to remember
they will want to know exactly what your plans are for coming
years, the market you will be promoting your product, service in
as well who your target audience are for this as well as how
much it will cost to make if necessary and the cost you will
sell it for, showing the profit you will make on each product,
item or service. One thing to remember is that Venture
Capitalists don't care about the dreams you have about this
venture, all they want is a good return on their investment in
your business.
Before going to see a possible Venture Capitalist the best
thing to do is to get advice from other business people in the
same area you want to go into to get their advice on your
product and or service and their honest opinion of the idea.
You will need a well detailed business plan when you meet up
with the Venture Capitalist and if you are turned away by them
don't give up keep trying, if show people you're serious about
your venture and wont fall at the first hurdle your more likely
to win people over with their own weaknesses.
Some points to consider are:
• Put all your thoughts on your new venture on paper,
brainstorm everything
• Research your proposed market or industry
• Get someone to argue against you to see if you have a water
tight solution
• If you have little knowledge on a certain area ask for help
from people who know
• Create a budget, showing every detail you can think of
• Read thoroughly your business plan to ensure there's no
errors
• Know who your competitors are
• Present yourself well – the more presentable you are the more
likely you are to be respected by the Venture Capitalist make a
good impression
• Make sure you know your speech, your business plan back to
front so you come across confident as you only have one chance
About The Author: Jene Pedder is the Webmaster of Angelstartups
who specialize in helping you find a suitable
http://www.angelstartups.com
Venture Capitalist for your business venture.
