Start Your Guide to Venture Capital

What does VK mean? Venture capital means venture capital as a form of financing. However, venture capital can refer to an individual venture capitalist or a venture capitalist who invests in companies. VC is also used to refer to venture capital firms. Thus, when someone talks about venture capital, they are referring to a group or individuals investing in start-up companies.

VC value expansion

So if you’re looking to raise venture capital, you probably have an amazing venture pitch, a great resume, you’ve launched your business, and you’ve made it through the angel money round. If not, think twice before throwing your business into a venture capital lair. Venture capital raising is for those companies that need millions of dollars, that have already proven their concept, have received support, and have probably already raised angel money. Venture money is the capital inflow you need to scale your business to the masses. If you’re thinking about scaling your business, it should have already worked in your test market.

While raising a big fancy Series A funding round can be attractive, it’s not always necessary. The Under30CEO methodology encourages you to keep your start-up costs under control, save your own capital, and find innovative ways to make your business profitable. However, we know that this is not always possible.

Why do you need venture capital

The main reason for raising venture capital is because your business requires you to be first in a large-scale market. If a larger company can come in and take all of the market share, or if well-funded competitors can emerge and become first movers, you should consider raising large amounts of capital. If you have a very small window to enter the market, then venture capital may be a suitable option.

Let’s be clear, we’re also not talking about your usual startup Joe. Just because you think everyone wants your product doesn’t mean you have to spend tons of money trying to get them on board. First-mover advantage isn’t always the best either. Most startups take a long time to find their place; think of Alta-vista, Ask Jeeves and all the other search engines that didn’t get it right. Often a third or fourth company finds a sustainable business model.

How to find venture capital

As we suggested in your guide to raising angel money, it’s time to take a look at your industry and see who has raised the money. If there is a company you aspire to be like, reach out and find out who invested in it. Most venture capital firms list the startups they have invested in on their website. You will want to find a firm that knows your industry. They will be more likely to invest if they already understand your business and will be the best mentors because they will have the experience and connections to help you.

The best way to find a firm is to get an idea from a warm lead. This will mean working hard to connect with people who may know investors. If you see a firm you want to target, reach out to venture capital portfolio companies and ask them for advice. Maybe this will lead to an entry. There are also websites you can use to find venture capital firms including National Venture Capital Association.

Make sure you know at what stage your venture firm is investing. Some firms invest in companies at an early stage, while others do not get into the game until later in the game.

What to Look For: The True Meaning of Venture Capital

• Venture capitalists are out for blood. Well, not real blood. They want your business to come out in the form of an IPO or an acquisition. This is when they see their return on investment. They will try to steer your business in a direction that may not actually be the best for your company. When people say that VC stands for Exit or IPO, that’s what they mean.
• Is your company going to make tens of millions of dollars in the next few years? These are the kinds of profits that venture capitalists are looking for.
• Get ready to move. Your venture investor will probably want to keep a close eye on your business or find you where you have access to the most talent in your industry.
• It won’t be a lifestyle business. Venture capitalists will expect a 100-hour work week and your business to take your whole life. This is serious.
• Make sure you are ready. Don’t just approach a venture capitalist with an idea; getting a meeting with a venture capitalist is quite difficult, do not go to them until you are ready. The internet makes it incredibly easy to build a business, build your product first, and then blow the company up with a great presentation. Venture capitalists are more likely to see a great product than a great business plan.
• Find a venture capitalist who can be a great mentor. Some venture capitalists work and others don’t. The most successful companies have the most successful consultants. Be sure to look who else is in their portfolio and see if you have any general synergies with the companies. Your venture capital will open up an amazing network for you.
• Fundraising takes a long time! Some companies need 20 presentations for someone to give them money. Now is the time you could work on your business, so develop a plan to keep your business running while you look for investors. If the process isn’t working, you don’t want your business to slip.
• Hire an experienced lawyer to help you sort through your list of conditions.