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Start-up Success: How to
Find Venture Capital
Author:
Clinton Douglas IV
Have you ever wondered how some companies find funding while others,
possibly yours, barely hold their head above water? Often, the key to
success during the delicate start-up years is having the right amount of
capital to launch development and marketing efforts. Once a company's
well established, funding can support even stronger growth and expansion
initiatives. Venture capital acquisition can help. Venture capital is
funding provided to budding new, fast-track companies by other
professional investors.
Venture capitalists review several companies, choosing just a few to
invest in based on management credibility, long-term growth potential
and business integrity, among other things. These venture capitalists
may use funds from high net worth individuals, foundations,
corporations, pension funds or their own personal capital equity to help
support the success of new business ventures. Their various investments
in start-up companies collectively represent an investment portfolio,
thus reducing overall risk. These investors focus on acquiring a high
rate of return in a five to seven year period.
While many venture capitalists are generalists, or supply funding alone
to a broad range of specialized sectors, others offering expertise in
one or more key roles within the company. Seed investing refers to
funding provided before a real product or business is even created, or
when a company is at the very early, ground-floor development stages.
Venture capital sponsored fairs, panel discussions and seminars are
great vehicles for venture capital relationship building. Attorneys,
consultants, business brokers and accountants also offer contacts with
venture capitalists. When seeking funding, relationships are key and
competition is high. First, identify a small number of companies or
individuals holding similar goals to your company's. Make sure you agree
when it comes to business growth, geographic positioning and investment
scope.
Venture capital assessment demands a great deal of time and energy, from
presenting a well-developed business plan and executive summary, to
educating your investors about your goals, budget, industry and growth
potential. Remember to communicate with your contacts on a regular
basis, nurturing the relationship and keeping them informed of progress
and news. Above all, stay optimistic, learn from your mistakes and adapt
your strategy.
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