How do i approach a venture capitalist?
I believe that I have a great idea.what is the procedure to approach a venture capitalist? Should I open a company first.how do I make sure that my idea doesn't leak out
- Andrew StraussLv 78 years agoFavorite Answer
Below given steps will help you.
1. Make professional contact with the venture capital firm. Walking in off the street, calling or sending an unsolicited email with a business plan does not usually succeed. Find a connection to a venture capital firm to introduce you or, if you don't have such a connection, use an online networking tool like Linkedin.com to make one. Coming to a venture capital firm through a mutual contact will hugely increase your esteem in the eyes of the firm.
2. Know your product inside and out. You should be able to give an hour-long lecture as easily as a thirty-second "elevator speech" about what your product is and why the market needs it. If you can't explain your product in both a long speech and an extremely short sentence, you need to get back to the drawing board before raising venture capital.
3. Develop an airtight business plan. A business plan is a rigorous document that takes a very specific format. It is generally not considered optional by venture capital firms, so you should have a professional looking business plan, complete with profit and overhead projections, before you go out to raise venture capital. Check out the Center for Business Planning for ideas.
4. Find the right kind of venture capital firm. Venture capital firms are divided by size and industry. Look for a firm that fits your project and focuses on the industry in which your product belongs.
5. After making initial contact with the right firm, send an executive summary-a one- or two-page document outlining the project's important elements. You can do this by email, but it is also appropriate to send a good-looking hard copy by mail or courier.
- SandraLv 44 years ago
Venture Capitalists are looking for the combination of a compelling product/technology and the technical and managerial talent to make it a reality. It is often more about the team and your ability to build a business around either a new technology, product(s) or a powerful business model that it is a specific idea. VCs primarily invest in great management teams, exceptional technologists or marketing experts. So, if you don't have the background, I strongly recommend you get it before pitching your idea. Generally, you need to have either several years of senior corporate experience in the right area for your venture or be a technical expert in the field of your products/business model. If you've got the goods, research the vc firms to find those that invest in your product/business area. You don't want to present to just any VC. You want one that is interested in your particular type of business. Networking with executives that have received funding or pitched to a particular VC can be a good way to gather insight. VC's websites can also be helpful at indicating their investment focus (and can show you if they already invested in a competitive venture) but they are often very broad when in reality they favor certain sectors that change over time with the business climate. Try hard to get a personal referral. It is much better to get a referral than mailing a plan in. VCs get hundreds of business plans & pitches and it is very hard to standout if you mail it in. An attorney or business associate can be a good place to get a VC referral. You also can network among business executives in the field of your business.