What is Venture Capital?
When Start-up companies, deemed to have high growth potential, need a certain amount of investment, wealthy investors with long-term growth perspective invest their capital. This capital is called venture capital, and the investors are referred to as venture capitalists.
Finding venture capitalists and getting venture capital can be daunting.
Here’s how you carry out the process that generally follows a standard order of basic steps.
However, there is no assured way to get the venture capital.
Many say that the more venture capitalists you contact, the higher the chances of getting investments. However, that’s a wrong approach.
Instead of contacting as many people as possible, try to identify the venture capital firms that align with your values because it’s simply a waste to spend time on people whose vision is entirely different from yours.
Here are the basic steps involved;
Finding an Investor
Look for individual investors, also known as “angel investors” or venture capitalists.
Ensure that you do enough background research to apprehend if the investor is reputable and has experience working with startup companies.
Try to understand if your long-term vision for your emerging company aligns with the long-term vision of the venture capitalists.
Find Investor’s Email Address
To go further, you need the email address of potential investors. And it’s not readily available on the internet.
With GetEmail.io, you can get emails of your investors.
In case you don’t want to spend money on such tools, GetEmail.io has got your back. With its free plan, you can get free credits every month.
Share Your Business Plan
Designing your business plan should be the first step for starting your venture.
When you wish to get investments, it is ubiquitous for investors to review your business plan to ensure that it meets their investing criteria.
Once you manage to find the email address of the investor, make an intelligent introduction because VCs rely on trusted connections to vet deals.
Never use a sales pitch. Your email should be a crisp, well-crafted explanation of your business, your vision.
After your intro, you can send your business plan to them.
You will not be asked to provide your whole business plan to a VC firm; nevertheless, you could be asked all of the tough questions that need to be answered in the business plan.
Besides this, you will be expected to have a four-year projection of the business’s income and expenses. It’s pretty evident that they might want to know how you would return their investment with a healthy return.
Work out the terms
When venture capitalists are ready to invest, your subsequent step is to agree on a
term sheet that explains the terms and conditions for the fund to invest.
Investment
Now that you both agree on a term sheet, you have paved the way for investment. After the investment, the venture capitalists get actively involved in the company. Venture funds generally come in rounds.
The next rounds of finance are made available as the company meets milestones.
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