Tips for Contacting Venture Capitalists
Venture capitalists are in business to make money. They have the ability to select companies that will make more money than their rivals. Having a good business plan will not fetch any funds. But an entrepreneur should have attention of venture capitalists and show confidence and expertise in your field then only venture capitalists come forward to negotiate with your business. As a business owner if you look desperate and don?t negotiate with venture capitalists then you get nothing from them since it is a toughest part of getting funds for your business from venture capitalist.
You need to do more and more research about company’s website and make sure that their Venture Capitalists investments listed criteria, including companies in the development phase and the industry or market is a great opportunity with your company. Then choose the partner of the firm focuses on companies like yours. For that you need to do some background research to make sure you are targeting the right venture capital firm.
Contact as many as venture capitalists before you approach them with your company details. But it is an intermediary?s work to determine how many to approach. The intermediary will take you to a larger number of venture capitalists because you cannot guarantee that all of them will be interested in your company.
Choose a good venture capitalist those who show keen interest in your company in the early stages of development, who can invest in your company without any terms and conditions so that your company wouldn?t go into loss and affects your production.
A venture capitalist should have good reputation in funding and the ability to get along with you, have the ability to give good advice about your business and contacts in the business and financial community. Have an eager to give success by helping small companies to grow.
While contacting venture capitalist after choosing them you need to follow some tips to have a face to face meeting with venture capitalist
A business owner while contacting a venture capitalist should have a draft or summary of pages or a 10-slide PowerPoint presentation to introduce about your business concept to them.
If you have any direct contacts at the firms drop a quick e-mail to your contact requesting for a meeting instead of posting a letter or fax as it takes time to communicate. But through E-mail as it is fast and can be easily forwarded to others in the firm.
Make introductions to people who can get you a stronger introduction to the venture capitalists. When you set time for meeting with an venture capitalists send your executive summary at least two to three weeks in advance of when you would like to meet and try to attend the meeting on time.
Checkout if venture capitalists have funded any companies who are your competitors or if venture capitalists are considering for funding a company which you consider has a competitor.
Ask the venture capitalists for a term sheet in which they agree to subsequent rounds of financing based upon milestones of gross or net profits. And even ask them whether they want to be a strategic Partner or introduce you to potential Strategic Partners to help you in sales with another company they have funded.
If followed above tips then you will have a higher probability of success in finding the right venture capitalist for you and your company. But there are three ways for a venture capitalist to exit from your business by acquisition, public offering or management buyout. Half of the decision to invest in your company is derived from if the venture capitalist gives them clear exit.