Wonder how most of the talked about start-ups always manage the right amount of VC funding at the right stage. And when these start-ups quote nothing less than million dollar of funding, one often wonder how they belt that under.
Achieving a venture capital funding for one’s start-up is a matter of pride and definitely no mean achievement. Won’t you think a million times, evaluate till you’re satisfied before you invest multi-million dollars into somebody’s dream, idea, thinking, business, product and mission? There is, therefore, a business approach that’s been defined when one seeks out funding from firms or businesses.
- The first step is to do introspection, and a self-analysis of own’s business idea. Question whether it is practical and can be scaled-up in the long run. Facts and figures need to support your business idea, vouching its viability and long-term growth and success.
- Then second important step is to remove expectations from your mind and clear off myths. The biggest myth is that getting venture capital funding will be easy if one has great academic credentials. It help you crack your first meeting with the venture capitalists, but to take things further your business case should speak for itself.
- Thirdly, an important consideration at this stage is understand how are you prepare to take on this business. Are you wanting it to become a high growth high worth company and deal with the extra-large magnitude of responsibilities. If you are then you will have to opt for VC funding at some point in time, if not then just be ready to bootstrap.
- Fourthly, ask yourself this question – is my business niche or mass? Investors are typically interested in businesses that have a target market size of at least a couple of hundred million dollars.That’s the kind of scaling up they look up to at the time of investing. This is the reason why niche businesses find it hard to get VC funding, as they simply can’t promise those numbers.
- Fifth, understand and get the motive behind your entrepreneurship. Is it money, independence and being your own boss, a challenge or a passion for something. Most VCs are interested in understanding the change you want to bring in the world with your products and services.
- Sixth, selling a significant stake of your start-up along the way also means doing away with single man decision-making. Your priorities should be clear well in advance.
- Seventh, consult some VC experts or veterans before pitching to a VC firm. Choosing the right VC can bring in value which could be more than just cash. Their experience in related field could turn out to be asset.
- Eighth, your grit for your success and project must reflect through. The VC is looking for someone who knows how to run a long race with belief, stamina and perseverance.
- Ninth, one of the most important tools that will communicate your seriousness in your business will be solid team in place.
- Last but not the least is knowing someone with VC connections will be helpful. A VC will be more attentive to a meeting request if the plan is recommended by a known someone of their fraternity whom they trust and respect.
About the Author:
Sri Divya Koganti, fascinating blogger and loves writing. She works as a Content Writer, at FabPromoCodes.in She is writer by day and a knowledge explorer in all. She is fond of reading books, browsing blogs and writing to share her knowledge and experiences in her articles.