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Tips on How to Attract Venture Capital
Anytime is a challenge for entrepreneurs looking for venture capital but now even more so. Competition is fierce and the jousting for the prize of venture capital funds bloodier. To make your quest for capital a little more bullet proof, we asked venture capitalists across the country what advice they would give to entrepreneurs looking for investors. 80 VCs responded. If you're on the hunt for investors pay attention to the following tips.
Reach Significant Milestones Before Seeking Funding
The more the early-stage company is able to accomplish on its own, the more attractive it is to venture capitalists, who now put a premium on the existence of real, live customers rather than vague notions
about the customers being 'out there.' The more milestones accomplished the more valuable the company, which means better terms. You won't have to give up as much of the company.
Be Prepared to Bootstrap the Company
During times when capital is less plentiful, entrepreneurs have to be prepared to go it alone until more investors jump back into funding
early-stage deals. Make every dollar do double duty. If it's possible to make do with what you have you'll be better off in the long run.
Work Harder and Do Your Homework
Finding capital for a start-up company has always been a difficult task, and many entrepreneurs have found it especially hard in 2010. But perseverance and taking the time to really understand what
investors look for in a company are two ways of improving the chances of obtaining funding. Investors are out there.
Have the Strongest Management Team Possible Before Seeking Capital
Investors stress the importance of the management team. You can have a cutting edge product but if experienced management isn't in place you're looking at an uphill battle. Management is important to venture capitalists and private investors, aka angel investors.
Build the Company More Slowly with Less Capital
Capital is being 'rationed" out in smaller increments, and quick exit strategies are no longer the norm. There most likely will be benchmarks that have to be met before the next segment of capital is available.
So while it's never been easy to get venture capital, not even during the good old gold rush days of the dot.com's, the challenge is even greater now. But if you have a strong management team, a solid business model and you're persistent, you just might win the battle.
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Article Source: http://www.articles3k.com
Dee Power is the author of several nonfiction books and the novel "Over Time" about Green Bay Football. Money, Love and Football: All the Important Things in Life. She and her partner have developed the Capital Connection website to provide small business financing resources, including private investors, venture capital and loans to entrepreneurs.