Need funds? This is how you approach VCs
Gathering finance is an important aspect for startups. There are various ways a startup can collect funds, Venture capitalist being one of them.
The most important aspect in a startup is garnering finances. When the options like bootstrapping or angel investing are exhausted, most people turn to venture capital for funding.
Venture capitalists are investors who supply capital to startup companies or established companies for expansion. They do this in exchange for mostly equity, and/or larger returns. They generally also exercise immense control over the company from the very beginning.
Network. One of the best ways to meet venture capitalists is to be introduced, or rather recommended by reliable sources. Venture capitalists rely on managers, officers, entrepreneurs to affirm the qualities of the entrepreneur seeking investments.
Prepare your pitch. Once opportunity does present itself, the entrepreneur must be sure of precisely what he wants out of his company. He must possess a clear understanding, and outline of his goals. And thus prepare a pitch much prior to putting it forth.
Stick together. In venture capitalists’ funding rounds, a lot of questions with respect to the entrepreneur’s co-founder or team members are put forth too. This is because before banking large amount of cash into a company, the VCs want to ascertain whether or not there lay differences in the functioning, ideologies of the partners which may prove to be hazardous for a company at its later stages. Hence, exhibit team work and accordance. They want to know your team, who you are and what values you stand for.
Model. Build a business model that is effective, and show them you mean to generate revenue. Assess all pitfalls and prepare in advance. Else, stick with a tried and tested model to ensure their funds a safe place.
Look correctly. The ‘right’ VC is a task to find. This is not only the person who is willing to lend you deep pockets, but also the one who lends you his experience, understands the idea you want to create and are working for, and supports it accordingly.
- To approach a Venture Capitalist having some points in mind can help. For example a Network. If you have good connections, it virtually builds your network and helps you gather funds easily.
- Having a strong model for the startup will help you in pitching it with full confident in front of the investors.