The Best Tips For Finding Venture Capital

Innovation The Best Tips For Finding Venture Capital Christopher Davenport Forbes Councils Member Forbes Technology Council COUNCIL POST Expertise from Forbes Councils members, operated under license. Opinions expressed are those of the author. | Membership (fee-based) May 18, 2022, 07:00am EDT | Share to Facebook Share to Twitter Share to Linkedin Christopher Davenport, MBA, is founder/CEO of Autoparts4Less (OTCBQ:FLES), a global online marketplace of parts for all kinds of vehicles. getty Not surprisingly, venture capital — in the past couple of years especially — has become one of the primary funding sources for startups and mid-range businesses to finance their growth. With 399 offerings collectively raising $142.5 billion , 2021 was the biggest year to date for initial public offerings (IPOs). So far in 2022, as of April, 87 more IPOs have already been introduced . But while it’s clear that venture capital is an important source for funding start-up costs, expansion and further integration with other businesses, the problem has always been how to get it. First off, you should know what venture capital is and what it does. It’s going to be impossible for you to hunt down leads if you’re not sure what you’re looking for. It’s not like the old days when someone had an idea and instantly had an investor take an interest in it and run with it. Especially now, with the internet ruling the world, the process of finding and acquiring venture capital has resembled finding needles in haystacks. Let’s first review the five main stages of venture capital. • Seed Funding: You require financing to develop an idea or concept of a product or service. MORE FOR YOU Google Issues Warning For 2 Billion Chrome Users Forget The MacBook Pro, Apple Has Bigger Plans Google Discounts Pixel 6, Nest & Pixel Buds In Limited-Time Sale Event • Start-Up Funding: The research and development of your idea or concept are complete, and everything is set to move into production or to supply the services. Usually, either a business plan, proposal or a prototype of the concept has been developed. • Emerging Funding: The product or service has been launched. Your business is already seeing profits, and you must now look for manufacturing or marketing funds to increase your company’s presence and the availability of the product or service. • Expansion Funding: Your company has experienced remarkable development and now requires additional funds to address increased demands. These funds are usually used to grow the business through expansion into new markets and products. • Bridge Stage: Your company has reached full maturity. Financing acquired here is typically used for mergers, acquisitions or IPOs. This is also the stage when investors cash out for significant returns on investments (ROIs). From this list, you should now be able to ascertain what kind of money you’re looking for, depending on the stage your company is in. A weapon of choice for most people seeking venture capital is the VCA Online Directory , a complete list of over 6,600 venture capital sources with complete profiles, contact information, management teams and more. From this directory, which can be sorted in several ways, you can then find and approach those sources that best fit your needs. If the list overwhelms you a bit, there is another, simpler way to reach out to proper venture capital places, but this requires strong Google expertise. Basically, look for news items on places such as PR Newswire , which broadcast articles and alerts on-the-minute about business goings-on — everything from stocks to expansions. These news briefs can be a gold mine for seeking venture capital if you include a few terms in a full search. For example, suppose you have an online marketplace concept, and you’d like to arrange to meet face-to-face with venture capitalists who deal with seed funding for these types of ventures. First, check PR Newswire for the phrase “seed funding.” A recent search brought up nearly 400 articles to look through, but you can narrow it down to your field or location, such as “online” or “Los Angeles,” etc. Next, read the articles you come across and look to see what similar concepts such as yours were funded and, more importantly, how. Gather a list of prospective venture capital companies at this point and get answers to the following questions. • What kind of projects does the firm fund? • What stages do they fund? • Do you know anyone who can help you approach a particular VC firm? • What does the VC firm need from you to fully explain your service or product? There are several ways to find venture capital sources away from the internet altogether as well. You can find various events or conventions in your area that deal with your industry or feature venture capital people, and you can pitch your project to them in person. You can meet with a venture capital representative when developing your business plan and receive advice. Writing a simple letter to a venture capitalist and inquiring about sending a “pitch” or “cheat sheet” also works wonders. Finally, see if someone you know or trust, such as your attorney, would be willing to send your proposal or pitch to a venture capital firm and recommend your project. Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify? Follow me on LinkedIn . Check out my website . Christopher Davenport Editorial Standards Print Reprints & Permissions