9 Factors to Consider When Looking for Funding From Venture Capitalists for Your Smart Startup

Only the smartest startups win the hearts and banks of venture capitalists. So, are you convinced that running the smartest startup has the best ideas for your business? Do you think you can hold a VC attention?

First things first, who are venture capitalists? They are the insurance companies, pension funds, or the wealthy individuals who are seen to invest heavily in stocks, real estate and other risky businesses with definite high returns. Every year, these people and businesses set aside a small percentage in their annual budgets and dedicate that money to investments in the risky businesses and startups.

The venture capital funds are run and managed by financial wizards or ex-entrepreneurs. They are often known as general partners.

If you think that your business is worth a shot at getting funds from VC, you should give it a try. But to avoid strolling into partitions and creating a horrible pitch or a very good however losing pitch keep the following factors or considerations in mind:

Growth and scalability of your business idea

To get to a nod from a venture capitalist, you should have great ambitions to launch a rapidly growing business and the ability to deal with the stress that comes with the growth. When you see that your business is accelerating towards the big leagues, then you may consider pitching to VC. Until then, find ways of making your business idea a big and fast-growing business.

Your reason (s) for starting the business

What did you have in mind when you started that business? Did you start it to be recognized as an entrepreneur or to cause disruption in the entrepreneurship scene? The only way for you to get the venture capitalists is by showing that you intend to cause a disruption in business.

As mentioned in the definition of venture capitalists, they are interested in risky business models. Therefore, before you set foot in the boardroom, have your reasons right. Do not waste time. Know that some business models and reasons for starting businesses do not appeal to venture capitalists.

Which business model does your business operate on?

Venture capitalists are attracted to and listen keenly to pitches by entrepreneurs who are willing to scale their businesses fast on the growth track. Fast growing and highly profitable businesses have higher returns. Venture capitalists need that money to reinvest in other startups.

The current size of your market?

In business, a niche is important when starting out. However, when you make plans of expanding, you should have a scaled up market size reaching out to millions and raking in hundreds of millions in dollars. A big market should be shown to have been reached when starting out. With a big market and an even bigger potential for rapid growth, a venture capitalist will consider giving you their money.

Percentage of your company you are willing to give up?

You already know that the capitalists would like to own a percentage of your business but Are you willing to share your company? If you do, what percentages can the venture capitalists own?

Having determined that you have a potential company to invest in, they will be willing to spend a big amount on your business. This translates to a big chunk of your business. Are you still looking at VC for investment?

Is the venture capitalist experienced?

There are many inexperienced VC in the market today. As a startup company, you need something more than the money. To grow your business as much as you visualize, a VC should have experience in the market. Self-sabotage should be avoided and possible mistakes turned into very valuable lessons.

Do you possess good leadership skills and can you guide a team?

Your educational credentials aren’t enough to convince investors. Your leadership skills should be exemplary and that should be seen in how your business runs. You should be able to build your business with the help of employees with one goal in mind. This is important in maintaining consistency and reaching the set financial goal even when the market shifts.

Will you withstand the pressure?

Successful businesses get so much attention and they are treated with glamour. Unfortunately, most people underestimate the blood, tears, sweat, and sleepless nights invested in the business. To gain the respect and the attention of venture capitalists, even without asking, you should show that you have built your business to where it is having gone through the biggest hurdles. Resilience is important in business.

Can you get that venture capitalist excited?

Your business models will be examined, numerous checkboxes ticked, and your background evaluated. However, before money changes hands, the venture capitalist must be excited. Trusting gut instincts is important in business and the VC listen to their guts every time.

Therefore, before presenting your pitch, ensure that you have the right business model. The current business state and the future projections should show an investor that they will miss something big if they fail to invest in your business. To win, you have to make an emotional connection with the venture capitalist. Realize that any other entrepreneur can present similar numbers and projections to them. Know what makes them tick and use that if you are very confident in your abilities.

In conclusion, getting a venture capitalist to sign their money over to you is an uphill battle. For them to reconsider your application for funding, look at the projections again, and to write a check, you should have a unique and winning business set up. For more details, you can get help from nationaldebtrelief.com

Your business should be seen as a means to solve a problem in society. With such details and vision, the investor will have a spark, envision the market opportunity. Unless you get them here, you will not grow your business through venture capitalism. Prove that yours is a smart business.

Author Bio: Isabella Rossellini is a renowned venture capitalist with big investments in some of the most disruptive businesses around. To learn more about investments, funding, and for more tips on growing startup businesses, you can Visit on Facebook

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