Tips That Can Help You As A Start-up Entrepreneur When Approaching Venture Capital Investor

Tips That Can Help You As A Start-up Entrepreneur When Approaching Venture Capital Investor

Written by Thriving Team

The Venture Capital investment is an investment capital fund that comes from financiers that are usually financially well-off, investment banks or mostly private financial institutions. This type of capital is mostly offered to high growth start-ups that exhibit stability and growth potential.

Venture Capital has the capacity of taking a small start-up company to a high level business that competes with corporates that have been in business and trading for years, hence the appealing façade that it has projected to many start-up entrepreneurs.

But the sad truth about it is that not every start-up will get this type of funding. Your company has to show growth and venture capital worthiness to even attempt on seeking this type of investment.

Here are some tips that can help you as a start-up entrepreneur to ensure that your business is venture capital worthy.

Just as there are different types of venture capitals out there, the people offering this capital have different preferences. Some venture capital investors invest only in technology because that’s the industry they understand. While other venture capital investors are not industry specific but rather seek after businesses that show growth potential and are not reflecting any form of risk to the money they will inject in your business.

High Return Rate

Venture capitalists are not investing into your business because they like you or your company. These investors put in their money because they are expecting a high rate return on their investment.

Before approaching a venture capital investor or any normal investor it is mandatory and advisory to do proper research on the company or individual you are approaching. Because he/she has the money you need and if they do not adhere to the same business ethics as you then both of you are wasting your time.

Transparency

When approaching a venture capital investor be transparent as much as possible.  Show them the financial standing of your company and not fabricated documents because these people are smart. So show them the true reflection of your business.

This creates a trust relationship from the onset. And since you have done your research and also came prepared, it is always great to show investors the return rate and at the same time an exit if need be.

Investors Are Partners (so be prepared for their involvement)

Finding venture capital investors is similar to finding a partner. If the partnership is not working then the fruits will show and in this instance it will be the business.