Venture Capital Firms and Funds
Tips & Advice to help you make your decision on Venture Capital Firms and Funds
If you have a company in its start-up or early phases, there may be money waiting for you. Venture capital firms and funds typically have between $25 million and $1 billion to invest in emerging companies, according to Entrepreneur.
Venture capital comes from managed funds intended to finance investment in young high-growth companies. If an investment group approves your business, they will purchase equity in your company. This capital infusion can allow a new company to develop an anticipated product or expand an already successful product or service into a wider marketplace.
For growing companies unable to receive traditional financing, receiving venture capital can be a solution. Sometimes you have to spend money to make money. Of course, venture capital is not for every business. Investors may retain ownership of a large portion of your company. Paying back investors usually requires that your company makes a public offering or is acquired by another business.
Often times, the best way to determine whether venture capital firms and funds are right for your emerging business is to research the possibilities. Business.com can be an excellent resource for businesses at all levels of growth. Learn more about venture capital and other options by viewing the links on the left.
Landing a Venture Capital Deal
Get your business plan and your management in orderBy Amy Gesenhues, Director of Marketing Autodemo LLC After a big boom and bust, venture capital funding is on the rise again. But today's VC investors want more solid information from the companies they choose to invest in than in the frenzied days of the Internet bubble. And remember that VC firms typically look to cash out in three to five years, particularly by seeing your company acquired or going public. Follow these guidelines to increase your chances of securing a venture capital deal:
- Create a high-level, comprehensive business plan.
- Find a venture capital firm that fits your company.
- Post your venture capital funding request online.
Create a business plan
The more thorough and complete your business plan is, the better your chance of securing venture capital funding. VC's will be looking to see that you have a unique product in a growing market and that you can forecast high profit margins and high growth in sales.
Try:
Use SmartOnline's Smart Business Plan software to write your business plan or contact VentureArchetypes to write your plan for you. You can also create your business plan using an outline from Venture Associates.
Find the right management team to run your business
You may have the greatest business idea in the history of the world, but that doesn't mean you know how to run a company. Venture capital investors want to know that the company they're investing in has the right people in charge. Recruiting qualified, experienced executives demonstrates that your business is set to succeed.
Try:
Use ExecuNet or the dmoz Open Directory to recruit executive-level management professionals from a variety of industries.
Find the right VC firm
Venture capital firms tend to limit their investments to a few industries. Find a firm that will fit with your company's financial needs, growth strategies and culture.
Try:
Use vFinance, Growthink Research or Capital Vector directories to find firms.
Let a VC firm find you online
The best way to get something is to ask for it. Posting your funding request online is a quick way to let investors find you. If you have a great idea with the right resources and a business plan to back it up, venture capital investors will be fighting to finance you.
Try:
Post your funding request online at the Go Big Network or Business Plan Posting.
- VCs typically take preferred stock in your company and seats on your board. If you're not willing to give up some ownership or control, look elsewhere for investment.
- If your business has been around awhile, get a private equity rating service to rate your business' value and what will be gained (or lost) from accepting venture capital funding.
- Landing a venture capital deal could take as long as six to nine months.
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