You can only go so far growing your business on your own, so if you’ve determined that you’ve reached the level to attract venture capital offers, you have to develop a strategic plan in order to gain the attention and trust of those willing to invest in your business. Venture capitalists can provide significant funding, but they also want to feel confident your business will succeed on a large enough scale that they will receive a significant payoff. Check out this inside look at raising venture capital for your business:
Set Your Expectations
Perhaps the most important thing to keep in mind when raising venture capital is that you will be giving up some control of your business, so set your expectations accordingly. Venture capitalists don’t just give you money and then sit silently in the wings and let you run things without input – in exchange for their funding, they will now have a say in your business dealings and decisions.
Do Your Research
Look into different venture capital firms to find ones that are most likely to fit your current needs. Research firms to find ones that focus on, or are at least experienced with, your industry. Also, ask around to see if they are used to working with businesses at your current stage of development, such as startups versus expansions.
Assess Your Comfort Level
When you raise venture capital, you are essentially embarking on a long and in-depth professional relationship. You will be interacting with these venture capitalists on a close level as teammates, so be sure to assess your comfort level when dealing with them. Opt for firms that you enjoy working with and who don’t make you feel uncomfortable or disrespected, or else you risk significant additional stress on top of growing your business.
Hone Your Business Plan
Make venture capital firms more comfortable taking a risk with you by developing a detailed and realistic business plan. Discuss your overall vision and highlight your accomplishments and projections, but also be transparent about your challenges. If you show that you are trustworthy, they will be more likely to get onboard with your vision.
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