Action Steps
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Have a business plan before dealing with venture capital consultants

Almost all of the experts say it's in the best interests of a business to have a plan going forward before trying to get venture funding consulting services to help market projects. Without this kind of pre-planning, some venture capitalist consultant shops may end up rattling your cage or pushing initiatives in directions you didn't intend.

I recommend: See sites like PlanMagic for some helpful resources in arranging a plan for investment capital. Or find solutions "out of the box" at software sites like Palo Alto.

Hash out the role of venture capital consultants in your venture

Another key issue is getting on the same page before collaborating. When both parties know what their incentives and roles are, the deal tends to get done with less drama and more results.

I recommend: Try sitting down with a venture capital consultation firm before signing to get concrete agreements on the specific commissions and payouts for services to avoid situations like those mentioned in this story from Grosse Point, MI. Get more on choosing the right venture capital consultants from this Venture Capital blog.

Use directory sites for getting to the venture capital consultants you need

It's a good idea to pinpoint venture capital consultants by industry experience, as well as by reputation. To this end, potential customers can find VC consulting firms by perusing directory sites listing VC consulting shops that will take on certain kinds of investment deals.

I recommend: Talk to the VC consultant firms listed in this Yahoo Directory to see which ones will work for you and get your projects made. Find more info and links to venture capital consultants at InvestorLinks.com.

Consider these points when presenting your company:

1. Have a solid business plan. A plan should cover what problem your business solves, who are the customers, the management team and the competition, and spell out projections for cost and revenue. Keep it short; no one will read a plan longer than 20 pages.
2. Giving a professional presentation is key to impressing investors. Learn PowerPoint – it's a business-meeting standard.
3. Be prepared to answer any and every question about your business and be willing to open the books to potential backers.
4. Ask the investors how they are going to help you besides opening their checkbooks.

Action Steps
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Give your pitch a test drive

Find out how you will be perceived by potential investors. Take an online test and get evaluated on your company's strengths and weaknesses

I recommend: Take the "business fundability test" from The Venture Alliance, an organization that also offers consulting and access to investors.

Plan for success

Learn how to write an effective, concise business plan that provides the information investors want to know.

I recommend: Startup business consulting firm Direct Incorporation provides a sample business plan that you can edit and update to fit the needs of your company.

Say it with PowerPoint

Create a short, effective PowerPoint presentation that will provide investors with the information they're looking for in a concise and interesting way.

I recommend: Venture capitalist Guy Kawasaki's blog provides tips on PowerPoint presentations (such as his 10/20/30 Rule of PowerPoint – 10 slides, 20 minutes long and no font smaller than 30 points) and other information from an investor's point of view.

Polish your public speaking

You will need to communicate your vision and passion to investors; they are investing in you as much as your company.

I recommend: Corporate speaking coach Joan Wood Moser's site provides tips on speaking to venture capitalists as well as individualized coaching through her company, Spoken Impact.

Helpful advice for making the most of this Guide

• •  Angel investors (groups of individuals who make investments as opposed to venture capitalist firms that manage funds in the billions) are a good route for a startup that hasn't received any outside funding yet. Having angels looking out for you will also help to impress VCs.
• •  One page of financial projections is enough. Investors want to see basic data such as how many customers you're shooting for, but don't have the time to wade through pages of Excel spreadsheets.
• •  Set realistic goals in your pitch that show you know the market and how tough it is. Having sales projections of $100 million in the first year won't impress investors and will make you seem naive
• •  Keep your presentation to between 30 minutes and an hour. Putting investors to sleep won't help your cause.

Action Steps
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Learn about being a venture capital consultant by taking courses

Instructors will teach you about the different phases of corporate development. Discover how venture capital consultants devise strategies to finance start-up companies. Become familiar with how they determine the value of businesses.

I recommend: VC Experts also provide venture capital consultation courses. Some of the courses you can take are the Stock Purchase Agreement and Valuation and Pricing.

Become proficient in venture capital consulting by attending seminars

Attend seminars to get comprehensive information on how the venture capital industry works. Learn from a venture capital specialist how to create a venture investment plan or how to organize a venture capital partnership. Other topics that speakers might discuss are how to assess investment opportunities and how to negotiate and close deals. Another important area you will need to learn about is how do you create and execute exit strategies.

I recommend: Check out Alameda County Small Business Development Center, which will teach you how to raise venture capital.

Learn about venture capital advisory firms through research reports

Read profiles of venture capital advisory firms through research papers. You'll learn where these firms are located, the areas they invest in, and how they devise their investment strategies. Learn how a company's valuation can impact venture capital deals.

I recommend: Market Research provides comprehensive venture capital consultants education and training. You’ll learn the hot sectors that VC consulting firms provide capital in. DowJones also provides reports on venture capital consulting firms. This report breaks down venture capital deals by region and security type.

Action Steps
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Accredited investor

Accredited investor is a definition set up by United States Securities and Exchange Commission. An accredited investor is an individual with a net worth of over $1 million or an individual with an income exceeding $200,000.

I recommend: The U.S. Securities and Exchange Commission goes into further detail about the exact nature of an accredited investor.

Angel

An angel, or 'angel investor,' is an individual who offers financial backing in the beginning and early stages of a new business or developing product.

I recommend: Small Business Notes explains in detail what an angel is and how angel investments typically work.

B round

B round financing is when venture capitalists have already given the first round, or 'A round,' of financing and still have enough interest in the business to provide a second round, or 'B round,' of financing. Later, they may provide further rounds, called 'C round,' 'D round' and so on.

I recommend: Venture Capital Reporter discusses a B round of financing for Skyrecon Systems.

Burn rate

Burn rate is how quickly a company uses their net cash over a specific time period, typically, one month.

I recommend: You can learn more by visiting Investopedia, which explains burn rate in further detail and offers how-to information on calculating it.

Hockey stick projections

Hockey stick projections refer to a chart illustrating cash, customers, revenue or similar numbers. If the chart is a hockey stick, it shows dramatic increases in the future. Some venture capitals won't fund projects with hockey stick projections.

I recommend: Gaebler Ventures explains the problem with hockey stick projections and discusses how to create a more realistic projection for potential investors.

Seed money

Seed money is the first capital raised for a start up business. It's often in the form of a loan, angel investors or venture capitalists.

I recommend: The New York Times reports on how environmentally-centered products and businesses may have an easier time obtaining seed money.