| In past years, attracting venture capital interest | | | | self doubts should be dealt with thoroughly before |
| might have been considered to be a relatively | | | | any capital is sought. |
| unchallenging feat by most successful entrepreneurs | | | | Venture capital as a concept has been around for at |
| and small business owners. With a sound business | | | | least a couple of hundred years, but it is only in the |
| model and a good growth strategy, it seemed fairly | | | | last couple of decades that private venture capital |
| straightforward to obtain the financial investment and | | | | investors have sought to invest in smaller businesses. |
| support which was needed to boost the business to | | | | There are some venture capitalists around today |
| the next level. However, recent months have | | | | who have a heritage much greater than a decade or |
| certainly changed the face of venture capitalism, and | | | | two. For this reason there's little point in a small |
| it is important to fully understand the most effective | | | | business trying to secure funding from an investor |
| means of approaching investors in the light of the | | | | who has generations of experience in venture capital. |
| economic downturn. | | | | Ultimately, however, potential investment will rest on |
| There are many small business owners who have | | | | a couple of aspects: the long term viability and |
| shied away from the concept of venture capital in | | | | profitability of the business model. For this reason it is |
| recent times, for three main reasons. The first | | | | essential for any business seeking venture capital to |
| reason tends to be a general uncertainty as far as | | | | make sure that the core viability of their business is |
| the economy is concerned. With global financial | | | | sound and has growth potential. |
| institutions and national banks collapsing in ruins as a | | | | This makes sense, because in a world where |
| direct result of risky or foolhardy investments, how is | | | | businesses cannot take anything for granted, |
| it possible to find a good, solid investor? The last | | | | regardless of their size or heritage, it is essential that |
| thing any business needs is an investor promising the | | | | they are not deluding themselves into thinking that |
| finance and then failing to deliver. | | | | they have a profitable business in the making. Any |
| The second concern that entrepreneurs tended to | | | | good investor will have the experience and |
| have lately is that the investment itself is unlikely to | | | | understanding to ask questions which pierce any |
| be easy to obtain. Investors are clearly much more | | | | flowery presentations and establish exactly how |
| cautious when approaching potential business | | | | viable the business is, how profitable it will be, and |
| investments. This has tended to encourage small | | | | what evidence and market research has been |
| business owners to make assumptions about their | | | | provided which does corroborate these facts. |
| own business model which may or may not be true. | | | | It is facts, not fluff, in which the investors will be |
| Specifically, one assumption is that their business is | | | | interested, and for exactly the same reason, so |
| not likely to win the interest of investors, and | | | | should the business seeking funding. To gain interest, |
| therefore there is little point in trying. | | | | today more than at any other time, it is essential for |
| The third issue facing business owners is the long | | | | businesses to look critically in the nuts and bolts of |
| term viability of their own business. Are their plans | | | | their company, the potential, the market research |
| and hopes more than simple misguided dreams? If | | | | and facts which can support their long term plans and |
| they have any doubts or worries about the future | | | | predictions. Once they have achieved this then they |
| strength of their business, then clearly investors will | | | | are closer to gaining the interest of a venture |
| see that lack of enthusiasm and pass them by. Any | | | | capitalist or private investor. |