When either aspiring or established businessmen want or need to raise substantive amounts of funding to launch or grow their businesses, many of them don’t take the traditional route of applying for bank loans or lines of credit. Intelligent businessmen know that the largest sums of liquid capital exist in a specialized part of the private sector. This specialized sector is known as the venture capital market.
Business Plan
No matter how much money a company wants to raise, whether it’s $50,000 or $50 million, the first step to having any chance of such fund acquisition from venture capitalists is to write a strong business plan. This plan should be between 25-50 pages, and it should include such sections as the company’s mission statement, a biographical description of the skill sets and experience of all of the company’s principals, income statements and balance sheets, and a breakdown of the specific expenses that total the aggregate funding amount being requested. A great plan is both a starting point and a direct, precise path to business success and adequate funding acquisition.
Be Prepared To Verbalize The Funding Request
In addition to the business plan, company principals seeking funding should practice gaining the knowledge and oral skills to verbally elucidate their funding requests. They need to be prepared to explain and justify the amount of funding they’re asking for, why it’s required, what will specifically be done with the money and why the amount being asked for is an appropriate amount. Venture capitalists and private equity groups, while having astronomical amounts of money to lend or invest, are not willing to fund more than is necessary to start or expand any business entity. So, the people wanting the funding from the capitalists have to really know their numbers inside and out and be rational about their funding requests.
Never Take No For An Answer
If the first venture capitalist turns down a businessman or a group of businessmen from a company, they shouldn’t despair. There are literally thousands of highly reputable and financially resourceful individual capitalists and firms out there in America alone. If one of them says no, the businessmen desiring their funding should simply persevere and contact another and another and another. With enough persistence and intelligence behind their approaches, a businessman will definitely find the amount of funding he requires from a capitalist if his idea and plan are capable of being highly profitable.
Always Follow Up
To find venture capitalists, businessmen can either purchase print directories that list them or search online for them in a similar manner. These directories will describe the them and their companies and also inform the businessman what areas of commercial interests they most desire to enter into funding agreements in. Moreover, it’s essential to always follow-up after a meeting with a venture capitalist. A thank you letter for them giving their time and advice should always be sent, and a request for a subsequent meeting is always an excellent idea as well. This tenacity and determination will manifest to the capitalist that the businessman seeking his funding is very professional and serious about making his business venture as successful and as profitable as possible.