Venture Capital is a form of funding for a new or growing company. It is usually given from a venture capital business that specializes in constructing high-risk financial portfolios. The venture capital business funds the startup company in return for an ownership stake or equity. Venture capital firms usually only finance one or two percent of the business plans they see. It is important to get the pitch right to ensure you are one of the companies financed.
The Benefits of High Growth Businesses and Venture Capitalists
Global countries are realizing that high growth businesses drive productivity, innovation and employment. They have reformed policies, laws and taxes to encourage the startup sector and wider investor participation.
Venture capitalists will actively work with startups as coaches and advisors in addition to injecting capital into the business.
Venture Capital – The Plant Like Stages
All companies start as an idea on a piece of paper. They ultimately can develop into a billion-dollar venture. There are different types of investments that help along the way. As the name suggests venture capital is the investment for the early stage.
Venture capital is usually given from a venture capital business that specializes in designing high-risk financial portfolios. The venture capital business funds the startup company in return for an ownership stake or equity.The stages of Venture Capital:
1. The Seed Stage – gets the company moving.
2. The Early Stage – helps the company that has shown its potential to accelerate marketing efforts and sales.
3. Growth Stage – accelerates the continual growth of the company.
How to Beat the Odds
You will need to get the investors’ attention – you can do this with an email headline that makes them sit up and listen. It could be an industry personality who agrees to become your advisor, an anchor investor who gives you creditability or an award you have received.
You need the right introduction – the most powerful introduction is from an initiator in the investor’s portfolio. You have already gained the investor’s trust. The next best induction would be from a client who can speak plausibly on how your product will revolutionize the industry.
Build momentum – You will need to keep investors interested. Send an email update each week that has a meaningful piece of news like press coverage, any new clients and feature releases.
Set Expectations – Investors need to know what you are planning to do with the money you earn. You will need specific answers to questions like:
• What would be achieved in twelve months.
• What staff would need to be hired.
• The cost involved.
• How investors would rate success.
Set a Deadline
Identify a deadline when the venture capitalist will need to invest. Enforce a conclusion to the momentum you’ve created.
The world envies the US venture capital industry as an economic growth engine. It is not a long-term fund. The venture capitalist buys an investment in a mogul’s idea, supports it for a short time and then moves on with the assistance of an investment banker. Pulling off a successful proposal is a huge achievement.