| ting your Business to Venture Capital Investors is an | | | | must justify choices to a manager, |
| attractive proposition. The investments are larger | | | | * The manager to an executive, |
| than you would get from friends, family and Angel | | | | * The executive to the CEO or Senior Partner, The |
| Investors, and often they are more willing to invest | | | | CEO/Senior Partner to the Investment/Credit |
| in subsequent fund raising rounds. | | | | Committee, |
| But Venture Capital investors are not always the | | | | * The Investment Committee or Board of Directors |
| easiest to get. If you don't grasp the realities of the | | | | ultimately to the shareholders. |
| Venture Capital environment, you may sabotage | | | | Each one of these people wants to look good to the |
| even an interested potential investor. Here are five | | | | next link up the chain, and dreads making a public |
| important keys to working with Venture Capital | | | | mistake. If you want your investment to be |
| investor. | | | | concluded, you need to provide your contact with |
| Venture Capital Investors are busy. This is just as | | | | EVIDENCE why you and your business solution are |
| true in economic downturns as during a boom. When | | | | the best choice for investment. |
| business is slow, business plans and propositions still | | | | The bottom line rules. When you provide your |
| come pouring in through the post. | | | | evidence, it had better include euro/dollars and cents. |
| Busy people ignore unsolicited email and letters, and | | | | If you are more expensive than your competition, |
| will not return your phone calls. Even when you are in | | | | what added value will you provide? What unique |
| the final stages of closing a deal, your contact may | | | | tangible benefits will they receive that make the |
| not return your calls for weeks. | | | | added investent worthwhile? |
| If you accept this as normal behavior instead of | | | | Friends, family and Angel Investors invest in the |
| obsessing about how you may have caused it, you | | | | category of nice-to-have, often to improve their |
| will sleep better at night and use your daylight hours | | | | quality of life. Venture Capital organsiations don't. You |
| more productively. | | | | must convince them that your business idea is |
| Hot buttons open doors. If you want to capture the | | | | something they actually NEED and prove how it will |
| interest of a busy person, you need to tell them | | | | enhance their bottom line and deliver a profitable |
| exactly how you can help them. Calling just to | | | | EXIT. Real-life examples of results, proof-of-concept |
| introduce yourself will not get their attention. | | | | at least, can speak volumes. Illustrations with charts |
| What do the people in your target market perceive | | | | and graphs are more convincing than any brochure |
| to be the greatest problems they face, or the | | | | and understanding the Financial Calculations goes a |
| biggest goals they wish to achieve? Ask these | | | | long way to convincing your investors that they will |
| questions of the people you serve and the other | | | | find that EXIT. |
| business people who serve them. | | | | No budget; no investment. Even when the Venture |
| Read trade literature or special interest publications | | | | Capital firm would like to be part of what you have |
| and educate yourself on the key issues in your | | | | and thinks you're the best idea they have seen all |
| marketplace. | | | | month, the deal won't go through if there's no |
| Then tell your investors in every communication how | | | | money in the fund. No free cash usually means your |
| your idea or business can help address these needs. | | | | project will be deferred until the next investment |
| Every choice must be justified. When you raise | | | | fund is raised. Always ask if the Venture Capital fund |
| money from a family member, friend or an Angel | | | | has free funding at the first meeting. Don't |
| Investor they are free to make investment decisions | | | | necessarily expect them to tell you how much is |
| based on instinct, whim, or gut feeling. But every | | | | available. But if your contact can't answer funding |
| Venture Capital investment must be justified to | | | | questions, it's also a strong clue you are not talking |
| someone else in the organisation. | | | | to the decision-maker. |
| * A junior associate within the Venture Capital firm | | | | |