How to increase your chance get venture capital funding for your new startup?


Venture capital firms provide tremendous funding to thousands of investments annually. This form of funding is essential for businesses that have limited operating history, and startup companies with limited funds. The funds provided are essential to growing your business to the great heights you have always dreamed. However, getting the venture capital funding is not an easy task as it requires series of decisions and choices to make for your business. This write-up summarizes the techniques that you can apply to increase your chances of getting venture capital funding

Now… How Can You Increase Your Chances for Venture Capital Funding?

1. Your Product or Service Should have a Potential for Growth and Sustainability.

business-growth-and-sustainabilityVenture capital firms often take the risk of investing their hard earned fund on monies for your business. However not a single investor will agree to invest in a product or service that has no potential for rapid growth and sustainability. Your product or service should promise a rapid growth in the future; this is because of most funding firms out there are looking to invest their funds for short duration 3-7 years and during which they expect high potential returns. You will unlikely not get funding if the product or the service you intend to offer does not meet this requirement.

2. Have a Clearly Defined Business Plan

This is the second important aspect of increasing the chances of getting venture capital funding has an airtight plan. A plan is important because it demonstrates to a potential funding firm that you are capable to your business idea into reality and harvest high Returns on Investment (ROI). A venture capital firm will approach a plan of activities that has a potential for grasping the relevant market and fitting perfectly well with the market for the achievement of measurable goals.

3. Showcase the Skills and Capacity of the Management Team

A market fit product or services with a combination of an achievable business plan is yet enough to get you to secure venture funding. A potential investment firm will enquire more about the management team responsible for the daily activities of your company, their skills, and the capabilities. This factor is important as the investment firm will get to know whether your team is capable of driving your business to success thus providing significant returns. It is good to make sure that your management team is fit and capable realizing your goals if you want to secure funding.

4. Provide a Well-Defined Budget of How the Invested Funds Will be Utilized

well-defined-budgetAfter the venture capital investors are satisfied with the above aspects of your business, they will enquire you to provide a detailed plan of how you will use the investments for the growth of your company. A tip is that you should provide exact figures and support this with a convincing argument of how the funding will enhance the growth of your business. For example, say $100,000 will be used for an advertising campaign, and $80,000 will be used to hire new employees to cater for increasing demand for services.

5. Approach Venture Capital Investors that Match Your Business Niche

Even though some capital firms may incorporate a broad range of investment, there are many which specialize in a particular niche- industries and markets. Specifically targeting the capital companies that are of relevance to your business and the services you provide, increases the chances of you getting venture capital funding.

6. Have Some Endorsements

Getting an endorsement means having someone public approval or support to something or someone. The endorsement is good as it validates your business worthy to the venture firms. Your business credibility determines whether your business gets funding or not. To achieve this, the venture capitalist will undertake an extensive assessment of your business to establish the following; the potential risk and opportunities. They will also determine whether you have a business partner, paying customers and how your company can acquire target customers. This will determine your credibility score. You can also provide personal references to vouch for you and increase your chances of winning an investment with an investment firm.

Conclusion

In summary, very businessperson want to see his or her business prosper and achieved the target goals. However, this is almost impossible without the finances or proper funding. The tips mentioned above are helpful and will improve your chances of getting venture capital funding for your business to prosper.