Sunday, December 14, 2008

4 Things to Bear in Mind When Seeking Venture Capital Funding

By Newton Carson

Entrepreneurs often face the challenge of raising money for their new venture. When the money is not available, one of the places to look is toward private venture capitalists. Venture capitalist invest in the project based on projections to reap huge returns in profits generated by their investment in your company.

Banking Verses Venture

You might be thinking, what's the difference in a venture capital and borrowing money from a bank? Banks look to make money on interest income, while venture capitalists look for long term gains. Most investors will hope to get three to five times their investment.

Don't Waste Time Hunting Them Down Yourself

You may be asking yourself, how do I get venture capital funding for my business? Often it is who you know. You need a specialized company who knows how to approach and line up venture capital money successfully. You won't regret it. The amount of time you will save by continuing to concentrate on growing your business will be invaluable during this time. Leave the heavy lifting of seeking venture financing for your business to the experts.

Entrepreneurs can approach the venture investors, but it can be a long and drawn out process. You may talk to a hundred investors before you actually find the one who is willing to invest in your project. It may take a numerous business meetings, conference calls, business plan revisions, with a number of venture investment companies before you actually find the one who will fund your business.

Create A Great Business Plan

One of the first things that a venture capital investor will need is a business plan. The business plan gives a timeline. In the timeline, it generally provides a ballpark idea on the financial outlay required and how long it will take to get a return on investment.

Final Thoughts on Venture Financing

Venture capitalists vary in the way that they approach your business. Some have a hands-on approach and will make sure that every penny of the finances is spent properly. Some are more laid back, and even more leeway. But in the end, investors want to see a profitable enterprise taking off. Stay focused on the business plan, be open to advice from your investors, and go about making your business successful. - 15790

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