By Donna Hayes You can have the most experienced management team, the best ideas, and a business that has outperformed all expectations, b...
You can have the most experienced management team, the best ideas, and a business that has outperformed all expectations, but without the right kind of investors, you might never get to the next level. For entrepreneurs without considerable tangible assets, a conventional financial institution may not be the right fit. You need to find venture capital funding.
Experts say that entrepreneurs who don't understand the difference between a venture capitalist and an angel investor, are not going to be of interest to a high stakes investor. Entrepreneurs starting a small business might find angels among their friends and family. These are people willing to invest money with or without some ownership in the company. Businesses, like those in the biotech or software industry, which tend to be high risk with high return potential, need another type of investor.
These are not easy business deals to make. Your business has to be growing at a high rate, and you will have to prove why that trend will continue. You will have to do extensive research to find an investor who meets your needs and vice versa. You want an investment firm with ties to your field and that has a history of investing the kind of money you need.
While you are researching you will probably come across companies offering to sell leads and investor databases that will ensure you find the funds you need. They might advertise that they can get the attention of the decision maker, who will read your business summary and be so impressed that you will get a call from him right away. Experts say that's not the way it works.
Trying to create your own shortcuts won't be successful either. Mass emailing investors is a waste of time. They see these kinds of tactics all the time and aren't fooled by them. You never know when someone you contacted this way might have been interested in your business plan if your approach had been smarter. Instead you need to narrow the field of potential investors and go after them individually.
There is no substitute for effective networking. You need to scour your resources in an effort to find people who have had some kind of contact with a potential investor. This could be someone mutually involved in an alumni association or a co-worker. If a decision maker, in a firm that interests you, is speaking at an event, you should make sure you are sitting front and center, then introduce yourself once the talk is over.
You may only have a few seconds to interest a high risk investor. You need to be prepared to grab him with an intriguing tag line that summarizes what your company is about. A professionally produced summary video may get you a chance to make your pitch in person.
Successful businesses often start with a little idea and smart marketing. Once it takes off, an entrepreneur needs sufficient capital to keep it on its trajectory. There are professionals willing to invest big money on the calculated risk they will get a big return.
Experts say that entrepreneurs who don't understand the difference between a venture capitalist and an angel investor, are not going to be of interest to a high stakes investor. Entrepreneurs starting a small business might find angels among their friends and family. These are people willing to invest money with or without some ownership in the company. Businesses, like those in the biotech or software industry, which tend to be high risk with high return potential, need another type of investor.
These are not easy business deals to make. Your business has to be growing at a high rate, and you will have to prove why that trend will continue. You will have to do extensive research to find an investor who meets your needs and vice versa. You want an investment firm with ties to your field and that has a history of investing the kind of money you need.
While you are researching you will probably come across companies offering to sell leads and investor databases that will ensure you find the funds you need. They might advertise that they can get the attention of the decision maker, who will read your business summary and be so impressed that you will get a call from him right away. Experts say that's not the way it works.
Trying to create your own shortcuts won't be successful either. Mass emailing investors is a waste of time. They see these kinds of tactics all the time and aren't fooled by them. You never know when someone you contacted this way might have been interested in your business plan if your approach had been smarter. Instead you need to narrow the field of potential investors and go after them individually.
There is no substitute for effective networking. You need to scour your resources in an effort to find people who have had some kind of contact with a potential investor. This could be someone mutually involved in an alumni association or a co-worker. If a decision maker, in a firm that interests you, is speaking at an event, you should make sure you are sitting front and center, then introduce yourself once the talk is over.
You may only have a few seconds to interest a high risk investor. You need to be prepared to grab him with an intriguing tag line that summarizes what your company is about. A professionally produced summary video may get you a chance to make your pitch in person.
Successful businesses often start with a little idea and smart marketing. Once it takes off, an entrepreneur needs sufficient capital to keep it on its trajectory. There are professionals willing to invest big money on the calculated risk they will get a big return.
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