There are just 750 venture capitalists companies in the U.S., and more than 600,000 new companies started annually. Now that’s competition. In order to attract a VC and grow your business into a lucrative exit by getting the funding you need, follow these tips:
1. Hold the Pain cure.
The market has pain, but where is the pain? That is what you need to ask yourself. Identify a segment of the market that needs your service or product and is not getting or they may not be receiving it in the correct way. If your firm can deliver a product or service that allows your customer to breathe a sigh of relief, then a VC sees you as an attractive company.
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2. These are sectors you should hang out with:
- Retailing/Distribution
- Biotechnology
- Networking and Equipment
- Software
- Computers
- Energy / Industrial
- Consumer services and products
- Medical Devices as well as equipment
- Instrumentation and Electronics
- Semiconductors
- Business services or products
- Entertainment and Media
- Financial Services
- IT Services
- Telecommunications
Obviously, there is more than enough room for firms of different persuasions and shapes. Try to have your business within this list and you end up being very attractive to the VC. (Source: PriceWaterhouseCoopers).
3. Position your firm in such as way that is can penetrate a growing and large market
Let’s face it, VC’s are wild over companies that are in growing and large markets – this is especially true when a firm has the ability to constantly penetrate new customers within that market segment. It is about big growth and fast exits. Therefore, get a hold of some reports from an independent market research company that clearly shows that there are customers that are just waiting for your product or service and then flaunt it.
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4. Work with a hot management team that has been around for awhile
If you have a team of management, a Board of Directors, and advisors that have the experience in growing firms like yours quickly and then to a lucrative exit, you look super good.
5. Write out some pick up lines and then use them
In order to wow a VC, you need a good pitch, a teaser email, an elevator pitch, a great executive summary, a well-written business plan, and a good slide presentation.
Start right now so that you can get the materials you need to be prepared when the right VC comes your way.
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