You’ve got a great idea for a new business. You’ve got a new product or service with a strong built in demand, a management team with an impressive track record and all of the independent market research you’ve had done shows that there’s practically no way you could lose. The only thing keeping you from a quick ride to a profitable IPO or buyout in 3-7 years is that you need to find startup capital.
The question you’re probably asking is where the venture capitalists are, exactly. The number of venture capital firms in the US is relatively small, about 750. Between these firms, somewhere between 3,000 and 4,000 ventures actually receive funding in any given year.
Click here to learn more on Venture Capital pitch <==== If you intend to get the attention of a venture capital firm and get their backing for your company, you need to meet with a venture capitalist in person. The following are some things you should do to help you get a meeting with a venture capitalist sooner rather than later so you can stop looking for funding and start growing your business:
- Buy investor databases:
A good database will include thousands of individual investors, venture capital firms and private equity firms, searchable by location, economic sector and stage of growth and development to narrow your search to the potential investors who are the most likely to be interested in your business.
- Read up on your target investors online:
When you look at venture capital firm websites, look for the following criteria:
Close to your company (200 miles or less distance)
Sector the firm focuses on (manufacturing, healthcare, etc.)
Stage of growth the firm focuses on (startups, mezzanine, etc.)
Partners who have a background in your industry
A portfolio of businesses which are similar or complimentary to your own
Active investment
Sizeable enough assets that soliciting more funding later on is feasible if needed
- Send out teaser emails to venture capital firms:
Send out a well written teaser to each of the firms or individuals on your list of potential investors, asking them for the chance to give your presentation. Naturally, you need to pique the interest of readers with the teaser; you want to leave them wondering how you’re going to add to their wealth.
- Network:
You know people – and they know people and so on. Ultimately, networking will always lead to someone who can help your business. Ask family, friends, business partners and anyone else you know if they could introduce you to any venture capitalists they happen to know. Even if these people are not the right fit for your business, they may know who you should talk to – and possibly make introductions for you as well.
- Make a point of attending industry events:
Venture capitalists would usually rather find new investment prospects for themselves, which means that industry events are one of the best places to be if you want to find them. Network early, network often and make sure that your elevator speech is solid and rehearsed until you can give it in your sleep and you’ll find investors sooner rather than later.